Something old, something new: Wolf, lawmakers return to crowded legislative agenda
Two months after winning a second term, Gov. Tom Wolf officially begins the next chapter today.
The York County Democrat enters his second four years as governor with hopes of advancing an agenda that includes several issues left from his first four years.
But even with the addition of 14 Democrats in the Republican-controlled General Assembly, Wolf may still encounter resistance, especially on some of those unfinished issues, such as a severance tax on natural gas and a higher state minimum wage.
But other issues – like workforce development and infrastructure spending – could be potential areas for compromise.
There is some precedent. Wolf was able to strike deals with Republican leaders on reforms to the public pension system and liquor laws. Lawmakers also expanded gambling and legalized the use of medical marijuana.
How will the new term shape up? The governor’s first budget address of the new term is slated for Feb. 5.
Here are some of the top legislative topics expected to come up this year, as well as others that have businesses concerned as a new legislative session gets underway.
Wolf already has made a splash by raising the idea of legalizing recreational use of marijuana for adults.
Top Republican lawmakers oppose the idea, but with the debut of medical marijuana in Pennsylvania and steps in other states to legalize recreational use, the topic could be a hot one this year in Harrisburg.
Wolf also has made a push on the environment.
Earlier this month, the governor signed an executive order to establish the first statewide goal to reduce carbon pollution. The order met mixed reactions from the natural gas industry as it could mean more government regulation.
A new transportation funding bill also could garner attention this year in Harrisburg. Act 89, the state’s last transportation funding law, was signed in 2013.
That law raised the state’s wholesale gas tax and imposed inflation-based increases on license and vehicle registration fees, but has allowed Pennsylvania to invest in infrastructure over the last five years.
While the funding has helped the state fix structurally deficient bridges and roadways, it also has given Pennsylvania the highest state gas tax in the nation: 58.7 cents per gallon.
Future gas tax hikes are a major concern for Jeff Georg, president of Dover Township-based electrical contractor ASCOM Inc., which has a fleet of 16 vehicles.
“It seems as if Harrisburg’s solution is to raise taxes,” he said. “It affects my cost of doing business. Short of moving my business to another state, which isn’t practical, it’s a continued cost burden.”
Georg acknowledged that gas prices have fallen over the last year, but he remains concerned about future tactics Pennsylvania lawmakers may adopt to fund infrastructure needs.
Expect a continued fight over the minimum wage, said Rep. Mike Sturla (D-Lancaster), who believes the larger group of Democratic lawmakers in the legislature will be more aggressive in pursuing an increase.
“The governor has talked about $12 per hour. I think $15 is closer to a living wage,” Sturla said.
The current rate in Pennsylvania is $7.25 per hour. But it was last raised a decade ago.
Democrats believe a higher minimum wage would save the state hundreds of millions of dollars in public assistance benefits, including costs associated with food stamps, subsidized day care and housing assistance.
Business groups typically oppose proposed wage hikes, arguing that market forces, namely a tight labor market, can boost pay without government intervention.
Georg said he supports raising the minimum wage, but believes it should be done in stages and tied to the consumer price index or some type of inflation measure.
Wolf and Democratic leaders also have been at odds with Republicans and business leaders over potential changes in the corporate net income tax, or CNI.
The governor has supported cutting the 9.99 percent CNI, but he favors linking any cut to what is known as combined reporting. Combined reporting would require multistate corporations to add together into one tax report the profits of all of their subsidiaries, regardless of their locations.
Businesses argue that combined reporting is burdensome and hard to administer.
House Democratic spokesman Bill Patton said he doesn’t see either side changing its position on the CNI.
Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry said as much after Wolf’s re-election in November.
“As long as the other side asks for combined reporting, it probably won’t go anywhere,” Barr said, adding that the chamber still expects to lobby for reforms.
The governor, meanwhile, has said he will continue to press for a severance tax on natural gas drilling. He has proposed the tax in each of his previous budgets, but he has been rebuffed each time by Republicans.
Last year, Wolf proposed tying the tax to the price of natural gas, beginning at 4 cents per thousand cubic feet for gas below $3 and up to 7 cents per thousand cubic feet for gas prices above $6. It’s unclear what new wrinkles in the severance tax debate will emerge this year, but the tax proposals likely aren’t going away, said Barr.
In a tight labor market, where many industries are dealing with aging workers and a lack of younger skilled workers, Wolf and the General Assembly could find opportunities to expand workforce development initiatives.
The administration has been pushing for more apprenticeship programs as part of its PAsmart initiative.
There are now nearly 17,000 apprentices in Pennsylvania, a number that has grown by 27 percent under Wolf. PAsmart received $30 million in state funding last year.
Lawmakers on both sides see room for further growth.
However, one of the lingering issues over apprenticeships in Pennsylvania is on-the-job training ratios.
Under a 1961 law, Pennsylvania contractors must have four licensed journeymen overseeing each apprentice on a job site, a ratio higher than that in surrounding states. Union shops can negotiate a lower ratio — often one to one — but non-union contractors, or merit shops, must follow the four-to-one ratio in all bids for government work.
Legislation has been circulating to fix the imbalance between union and merit contractors.
The leader of York Township-based Kinsley Construction, the midstate’s largest general contractor and one of the region’s biggest employers, said getting more equitable training ratios is the biggest issue he would like to see addressed in Harrisburg.
“Getting and training new employees is a real challenge,” said Jon Kinsley, Kinsley’s president and CEO.