May. 20, 2019

Municipal Financial Reform Package

Several of my House colleagues and I – Reps. Barb Gleim (R-Cumberland), Andrew Lewis (R-Dauphin), Natalie Mihalek (R-Allegheny/Washington) and Valerie Gaydos (R-Allegheny) – have introduced a five-bill municipal government reform package to ensure an effective and broad approach to municipal government for the 21st century.

The 2008 financial crisis in the United States and the continued concern about instability in municipal financing in other states as well as in the Commonwealth requires a fresh look at the controls, processes and governance relating to municipal debt so that the risk factors influencing municipalities are known and contained. Bills in the package include:

The Local Government Debt Act, House Bill 882 would provide a “second set of eyes” that require a review process by the Department of Community and Economic Development for municipalities entertaining complex financial transactions and prohibit “cross guarantees” by municipalities, allowing one municipality to guarantee and write of the debt of another.

House Bill 883 would provide a control on conflicts of interest – such as a municipal official giving contracts to his or her friends or his or her own company – by putting in place an ethical purchasing standard for municipal bodies and purchasing officials. While this is already illegal, the legislation would provide teeth by allowing local law enforcement and the state to directly make criminal charges should a violation occur.

House Bill 884 would place severe restrictions on the use of interest-rate management agreements, also known as “swaps”. Currently, there are no restrictions on the use of interest-rate management agreements by a first-class city or a first-class county. Swaps are contracts under which parties agree to exchange (or swap) cash flow payment obligations. Quite simply, swaps are a form of gambling with public funds that can lead to financial disaster and must be restricted in their use. Under the legislation, such swaps would require prior approval from the Department of Economic Development and automatically be subject to audit by the auditor general.

House Bill 885 would help ensure public projects get completed at no extra cost to taxpayers should problems occur. For example, if a municipality contracted to build a bridge and the construction company went out of business before the bridge was built or completed, the state or municipality could go directly to the insurance company to get the bridge built, and then the insurance company could later seek compensation from the former construction company.

I have also introduced House Bill 320, which has the same basic intent of House Bill 884, but it applies to second- and third-class cities.

As a package, these bills are designed to prevent another financial catastrophe like the Harrisburg incinerator debacle from again occurring in Pennsylvania by adding a state-level review before a municipality advances a complicated and technical financing plan or guaranty.
 
 
10-Year Limit on State Tax Collections Passes Finance Committee

The House Finance Committee recently voted unanimously to approve my legislation to establish a 10-year time period for the Pennsylvania Department of Revenue (DoR) to collect assessed Personal Income Tax and Corporate Net Income Tax. Under current law, there is no time period for the DoR to collect assessed Personal Income Taxes.

I have heard from a number of constituents who have been receiving notice, in some cases 15-20 years after an assessment was made, that they owe the Commonwealth various amounts of assessed tax, often with added penalties. This is not only an unnecessary burden on taxpayers, but also irresponsible and inefficient governance.

House Bill 17 would establish a 10-year collection window, similar to that of other states as well as federal statute, in which the DoR would be eligible and required to collected assessed taxes. The only exception would be in the instance were a citizen or business knowingly commits fraud in an effort to avoid paying assessed taxes during the established time window. The measure now moves to the full House for consideration.
 
 
Coffee & Camaraderie

 

Compeer Corps of Lebanon County invites all veterans to join them at 9 a.m., on Friday, May 24, and every fourth Friday thereafter, for Coffee and Camaraderie at Heisey’s Diner, 1740 Route 72. All veterans are welcome to this FREE event! Come and share your story.
 
 
Meet Silver, the Arson Dog!

   

Here I am pictured with Silver, an arson dog with the City of Bethlehem’s police department and Detective/Deputy Fire Marshal Doug Northstein. They were at the Capitol last week to demonstrate her ability to sniff out accelerants in fire investigations. Arson dogs substantially increase law enforcement’s ability to identify and prosecute arson cases. Silver can sniff out a drop of gasoline in an area the size of a football field!
                                     
 
School Counselor of the Year!

 

Congratulations to Jayne Hain for her recognition as the 2019 Pennsylvania School Counselor of the Year by the American School Counselor Association.
I’ve known Jayne for quite some time and I am extremely impressed with the great job she does at Southwest Elementary School and for her compassion.
Our school counselors are true assets in our communities for our children.
Jayne, well done!
 
 
Fish for Free This Weekend

 
If you’ve been thinking about trying fishing or wanting to introduce your child or a friend to the joys of fishing, you’ll have a great chance to do so this weekend! The Pennsylvania Fish and Boat Commission will host the first of its two annual Fish for Free Days this Sunday, May 26.

On Fish for Free Days, anyone -- resident or non-resident -- can legally fish on all Pennsylvania waterways without a license. All other fishing regulations will still apply. For your convenience, there are even opportunities to borrow equipment from certain sites at state parks and other locations. You can find those locations by clicking here. The second Fish for Free day is scheduled for Thursday, July 4.
 
 
Armed Forces Day

   

It was an honor to be the reviewing officer for the Berks County Parade honoring Marines on Armed Forces Day, Sat., May 18.

Thank you to all to all veterans, military personnel on duty, their families and those who participated in the very solemn event which occurred during the parade and to the entire planning committee of the parade, especially Diane Price. Semper Fi!
 
 
Supporting Our National Guard Members and Their Families

Recognizing the sacrifices made by the families of PA National Guard members, the House approved legislation to provide them with education benefits. House Bill 1324 would extend our current Pennsylvania National Guard Military Education Program by including a Guard member’s spouse or child in this benefit program. The benefit would pay for 10 semesters/quarters, or five years equivalent, at the Pennsylvania State System of Higher Education tuition rate.

The Guard member could earn these educational benefits for his or her spouse and/or children by committing to a second obligation of six years with the Pennsylvania National Guard. This would help retain current National Guard members and attract transitioning military service members to Pennsylvania while also supporting Guard families. The bill now moves to the Senate for its consideration.
   
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