The House and Senate Appropriations Committees wrapped up their budget hearings with the heads of state agencies and state-related entities last week before the work of negotiating a spending plan for the 2023-24 Fiscal Year begins.
The hearings featured conversations with Acting Department of Revenue Secretary Pat Browne, who was asked questions on various topics at a House Appropriations Committee hearing, including whether the proposed budget and long-term structural deficits factor in hypothetical revenues coming to the state from Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative or any other carbon tax. Browne deferred to the Department of Environmental Protection to provide a full answer but that $6 million existed in the Clean Air Fund to make up for any potential deficit. He also spoke to skill game activities and the lack of regulatory and tax structure, saying that this is “significantly affecting the other gaming receipts in the lottery fund,” estimating that it could be around $150 million and growing. When asked about the fiscal impact of a proposed minimum wage increase to Pennsylvania’s Sales and Use Tax in the first six months of the Fiscal Year, Browne confirmed that it would be around a $50 million impact and “somewhere closer to $117 million in revenue” in years after that.
The Department of Labor and Industry’s hearing before the House Appropriations Committee focused largely on the familiar issue of Unemployment Compensation claimants not being able to get through to the department to file their claims – an ongoing issue that the department has attempted to address with a new computer system that was implemented in 2021. Acting L&I Secretary Nancy Walker told committee members that she understands the frustrations and that an average 67-minute wait for calls and a backlog of more than 30,000 UC claims are unacceptable. A related discussion centered on fraudulent claims, on which 25 staffers from the department’s internal audit division are working to combat with the help of 47 staffers from the office of UC Tax Services. The governor has proposed $89 million in state funding for L&I in FY 2023-24, an 11.4 percent increase.
In a House Appropriations hearing with the Department of Community and Economic Development, Acting DCED Secretary Rick Siger said that a goal for his agency is to create ties between robotics developers and local manufacturers so they will want to build their products here in the Commonwealth. According to a story in the Pittsburgh Post-Gazette, Siger echoed Gov. Shapiro’s inauguration day remarks that he is “sick and tired” of seeing Pennsylvania lose investment opportunities to other states and that he believes Pennsylvania needs an aggressive, competitive agenda that he would take “a hard look at the way we do economic development.”