With Revenue Deal Apparently Close, PA Senate and House Both Return to Session This Week

From PA Chamber of Business & Industry

The Senate wasn’t scheduled to return to session until Monday, Oct. 16, unless any real progress had been made on negotiations to finalize the $32 billion 2017-18 state budget with a revenue plan that will pay for it. It now appears that is the case, as the Senate has announced its return to session today to join the House in hopefully closing out a deal on the months-late spending plan.

While details remain limited, it appears that the plan will include fund transfers, video gaming terminals at truck stops and borrowing against the state’s Tobacco Settlement Fund. It is also said to include a commercial storage tax that will impact companies that lease commercial space. The governor has emphasized that he is only interested in signing a budget with recurring revenue. Last week, it was rumored that completion of the deal was hinging in part on whether it would include another tax on the natural gas industry – a proposal that the PA Chamber continues to lead a coalition against due to the hardships it would place on one of the state’s most promising industries. Early last week, House Democrats were planning to bring up a discharge resolution to force a natural gas severance tax proposal (H.B. 113) to the House floor – a plan that ended up falling through due to lack of support to get 102 votes in favor of the resolution. Before the decision was made to shelve the proposal, the PA Chamber sent a memo urging House lawmakers to vote “no” on the discharge resolution to H.B. 113, along with any other proposal that would result in higher energy taxes on our state’s businesses, consumers and industries.  

If the new revenue plan earns enough support in the House and Senate, it could be voted on as early as this week – a situation that we are closely monitoring as we continue to advocate for a budget that doesn’t put undue burdens on the state’s business community.

Being Better Consumers: How to Control the Cost of Health Care Through Price Transparency

From ChamberChoice and Smart Business Pittsburgh

As the cost of health care continues to rise, it is crucial for consumers to better understand the actual cost of health care and the need for greater price transparency.

“After all, we practice consumerism when it comes to shopping at the grocery store, buying clothes and other products and services. We shop for sales, compare prices, brands and research online with one goal in mind — to find the lowest price and save money,” says Ron Smuch, insurance and benefits analyst at JRG Advisors.

Smart Business spoke with Smuch about how employers can encourage price transparency in their health plans.

Why isn’t the consumerism that comes so naturally in other areas of our lives used in health care?

Understanding the true price of health care can be mind-boggling. Rates and costs can fluctuate depending on your insurance plan and where services are provided. Often, as a patient, we have no idea the total amount we will pay for a test or procedure until we receive the bill from the insurance company. We rely on the assumption that we simply ‘have insurance’ with no consideration or research as to the actual cost of a procedure.

Greater price transparency allows consumers to clearly see the price of treatment and determine their out-of-pocket costs before receiving care. The importance of transparency is such that there are several provisions in the Affordable Care Act addressing the issue. Although there are requirements for health plans as to transparency and reporting, there has yet to be full implementation of the law.

How else can price transparency lower health care costs?

In addition to educating consumers, price transparency in health care can also lower costs for claims payments and common medical services. When consumers are aware of the price for tests, procedures or medications, they pay more attention to treatment options, provider options and the actual need for a given test and whether there is a more affordable option available. Ultimately, known pricing creates smart shopping. Health care cost transparency creates competition, which lowers costs.

A 2014 study published in the Journal of the American Medical Association found that allowing patients to access price information for several medical procedures before obtaining health care services could lead to lower health care costs. The study targeted medical claims paid by employers on behalf of their employees after a price transparency tool was made available to them. The costs for employees who utilized the price transparency tool were lowered by 14 percent for lab tests, 13 percent for imaging procedures and 1 percent for office visits, in comparison to employees who didn’t use the tool. The actual dollar savings for those using the transparency tool for imaging procedures equated to a per incident savings of $124.74, $3.45 for lab testing and $1.18 for office visits.

What tools are available to help promote price transparency?

Price transparency has slowly evolved through the continued popularity of health savings accounts and high deductible health plans in an effort for consumers to lower their health care spending. A person with a high deductible is more likely to be more conscious and concerned about price, which results in their curiosity to inquire about how much things cost. This will likely force medical providers to be more transparent with their pricing.

The on-going demand and attention to price transparency in health care has resulted in the development of medical cost savings companies offering price transparency tools that allow a consumer to ‘shop’ the price for medical services in their surrounding area often by zip code and before the time of service. These tools and capabilities are useful to consumers who want to compare prices in order to make more informed decisions about their health care.

Price transparency can have a tremendous impact, educating consumers about health care costs and their understanding that more expensive doesn’t always mean better. Furthermore, transparency can lead to a more efficient health care delivery system and curb rising costs.

PA Chamber to Hold Webinar on Federal Tax Reform

Since last year’s election and the new executive administration and legislators took their offices in January, one issue that has been discussed but hasn’t necessarily been at the forefront of the daily news is federal tax reform. That issue will likely be front and center soon, as congressional leaders have said they will be taking up the issue soon, and it is also one that when resolved, will likely have an impact on all businesses large and small. 

With that in mind, the PA Chamber of Business & Industry will hold a webinar about what businesses should do in preparation for the expected changes to the federal tax code in the next year. The webinar will be held on Friday, Oct. 20, from 11 am – noon. Visit the PA Chamber page for more information or to register. Also, below is the full description of the event (via the PA Chamber).

The Potential Impact of Federal Tax Reform Proposals on Businesses— between the broad outline of the Trump administration tax reform plan and the House Republicans’ “Blueprint” business tax plan, sweeping changes are being discussed for federal tax reform that could have a significant impact on companies, as well as individuals.  Indications are that some federal tax reform will become law in late 2017 or early 2018. 

While the final outcome is uncertain, businesses should consider taking immediate measures to best position themselves for anticipated changes to the tax code.  It’s important not to wait for the legislative process because many opportunities must be implemented, or require significant planning, before tax reform becomes effective.  Business decisions made now have a long-term economic impact that could change under tax reform. 

The objective of this webinar is to help companies understand the federal tax reform initiatives by providing strategies on what they should be doing now to plan for these reforms.  The presentation will be delivered by leading tax professionals from the Stevens & Lee/Griffin platform, including Scott Balestrier, former senior income tax partner at E&Y, KMPG, and Anderson; Jay Wagner, a noted estate tax lawyer; and Joe Harenza, Chairman of Stevens & Lee/ Griffin and CEO of Griffin Financial Group, one of the largest investment banks in the Northeast headquartered outside of NYC. They will discuss:

  • A Brief Overview of the Policy Considerations Driving Federal Tax Reform and related timing
    • Budget Deficits, Federal Debt, Sluggish GDP Growth
    • Less than Competitive Tax System
    • Stated Goals of Tax Reform
    • Challenges
    • Tax Reform: “If” and “When”
  • Outline and Analysis of Important Provisions
    • Individual Taxes: Income and Estate
    • Corporate Taxes, Taxation of Pass-through Entities
    • Capital Investment and Interest Expense
    • International Issues
  • Potential Impact of Tax Reform on M&A, Real Estate and Manufacturing and Industries
    • M&A for For-Profit Companies
    • Manufacturing
    • Other Industries

Also available to provide commentary on the international aspects of tax reform will be Wilfred Muskens, President of Stevens & Lee/Griffin International (SLGI) and Samuel A. McCullough, former Secretary of DCED and Chairman of SLGI.

PA Department of Health Seeks Input on Regulations for Medical Marijuana Program

The Pennsylvania Department of Health is seeking input from patients and their caregivers on what should be included in the proposed regulations for the state’s new medical marijuana program. The deadline to submit public comments is next Monday, Oct. 2. The draft regulations can be viewed on the PA Dept. of Health’s website. The draft regulations were posted just last Friday, so the public comment period is set for just 10 days. Anyone interested in making comments should go the department’s online form to submit. 

Pennsylvania’s medical marijuana was signed into law last year and is expected to be fully implemented in early 2018. The program allows residents of PA that have one or more of 17 medical conditions to access medical marijuana with a prescription. Locally, Green Thumb Industries (GTI) is in the process of setting up a medical marijuana cultivation center in downtown Danville, where it will grow (but not distribute) medical marijuana that will be distributed in other parts of the state. GTI expects its Danville operation to be up and running by the end of the year, and plans to add up to 100 jobs in Danville within the next three years. Earlier this month, it held a job fair and town hall at the Danville Borough building, both of which attracted hundreds of attendees. 

Revenue Deal Moves Closer to Conference Committee as State Credit Rating Gets Downgraded

From PA Chamber of Business & Industry

The state Senate returned to Harrisburg last week, days after the House passed its version of a non-tax revenue package to pay for the $32 billion General Fund budget that became law on July 10. Senate leaders quickly made it clear that they didn’t support the House’s plan to fill a $2.2 billion revenue gap through one-time transfers, securitization of the Tobacco Settlement Funds and liquor and gaming expansion; and voted 43-7 on Wednesday to non-concur in the legislation.

This makes it all the more likely that the revenue deal will ultimately be decided through a conference committee in the coming weeks. This little-utilized procedural move will form a committee comprised of lawmakers from both chambers to reach consensus on a revenue plan that will then be voted up or down in the House and Senate. The need for them to act has hastened quite a bit, as the Commonwealth was met with the unwelcome news last week that credit rating agency Standard & Poor’s downgraded the state to an A+ rating; which is only better than two other states well known known for their financial problems – Illinois and New Jersey. According to S&P, among the reasons for Pennsylvania’s downgrade were a “misalignment” of revenues and expenses in the 2016-17 fiscal year that triggered the current deficit; failure to finalize the revenue package for the $32 billion budget that became law in July; and state Treasurer Joe Torsella’s decision to stop extending a line of credit to pay the state’s bills, which has resulted in missed payments due to cash flow problems.

Following the Senate’s non-concurrence vote last Wednesday, the chamber recessed to the call of the President Pro Tempore (a six-hour call) meaning that they will be ready to return to the Capitol should a revenue resolution be reached.