GOVERNOR FORMS INTERAGENCY GROUP ON ELECTION SECURITY
On June 20, Gov. Wolf announced plans to launch an interagency workgroup focused on strengthening election security protections and maintaining integrity and preparedness for Pennsylvania's elections.
The workgroup brings together eight state agencies and offices, under the chairmanship of Robert Torres, Acting Secretary of the Commonwealth, and John MacMillan, Deputy Secretary for Information Technology and Chief Information Officer under the Office of Administration. Members also include the Office of Homeland Security, the Pennsylvania Emergency Management Agency, the State Police, the Office of State Inspector General and the Department of Military and Veterans Affairs.
In creating the workgroup, Gov. Wolf acknowledged that the county boards of elections are already vigilant in assessing potential vulnerabilities in the election system and taking steps to assure the security of the voting process. In addition, the state uses a layered set of defenses and multiple tools to protect voting systems, which are not connected to the internet. The workgroup is designed to build on these existing efforts by collaborating on increasing security resources, training, support information and preparation at all levels of election administration, and will serve as a hub for tips and information. Members will also hold community forums as well as table top exercises designed to train election personnel on how to prepare for a wide range of scenarios.
At the same time, Gov. Wolf sent a letter to Congress urging them to provide an additional $380 million in Election Assistance Commission (EAC) grants to help support efforts by the counties' boards of elections to meet the highest standards of election security and integrity. While noting that Congress has already allocated $380 million in Help America Vote Act funds this year, with $13.5 million directed to Pennsylvania, Gov. Wolf indicated that more funds are needed in the next fiscal year. Pennsylvania has issued a directive to all counties that any newly purchased voting equipment must have a paper ballot or receipt for voter ballot verification, and that counties must make determinations for new voting equipment by the end of 2019, for deployment by the April 2020 primary elections.
STATES FILE SUIT OVER CHANGES TO SALT DEDUCTIONS
Several states are challenging caps to the state and local tax (SALT) deduction limits enacted as part of the federal Tax Cuts and Job Act in late 2017.
Prior to the 2017 law, individuals were permitted to fully deduct their state and local income and property taxes from their federal income tax obligations. The compromise bill that Congress sent to the President capped the SALT deduction at $10,000 for a combination of property taxes and either income or sales taxes.
On July 17, New York Attorney General Barbara Underwood filed a lawsuit in federal court on behalf of her state, along with the attorneys general in Connecticut, Maryland and New Jersey. The lawsuit argues that the caps on deductions violate the U.S. Constitution's 10th Amendment because limiting the deduction interferes with the states' ability to guide their own fiscal policies. In particular, the states indicated that because the caps will reduce the relative wealth of taxpayers in their states, they will make it more difficult for states to maintain their current taxation policies and make it more difficult to raise revenue in the future. The suit further references the 16th Amendment, which gives Congress the power to collect taxes, arguing that the understanding when that amendment was ratified was that the federal government, to the extent it taxed income, would provide a deduction for state and local taxes.
Several states have also passed their own legislative workarounds to the caps, such as a New Jersey law allowing local governments and taxing districts to set up charitable accounts to pay for services normally paid for by property taxes, so that taxpayers could deduct those taxes as charitable contributions. The U.S. Treasury and Internal Revenue Service are monitoring the workarounds, saying in May that they would be issuing proposed regulations regarding the SALT deduction and its relationship to federal charitable contribution deductions. No proposed regulations have yet been issued.
REP. SHUSTER RELEASES DRAFT INFRASTRUCTURE BILL
In late July, U.S. Rep. Bill Shuster (R-PA), the chairman of the House Transportation and Infrastructure (T&I) Committee, released an infrastructure proposal designed to authorize and fund several transportation infrastructure programs.
Among other provisions, the proposal would extend authorization of the Fixing America's Surface Transportation (FAST) Act for an additional year, to provide $18 billion for programs in FY 2021. It would also provide $3 billion for Better Utilizing Investments to Leverage Development (BUILD) grants, formerly known as TIGER grants, with a focus on rural areas and an increased local match requirement. In addition, the proposal includes a 15-cent-per-gallon increase in the gas tax and 20-cent-per-gallon increase in the diesel and kerosene tax in 2020, along with other new taxes on transit fuel, bicycle tires and electrical vehicle batteries. The taxes and fees are designed to contribute to the solvency of the Highway Trust Fund (HTF). A new Highway Trust Fund Commission would be tasked with conducting a study by 2021 on HTF funding levels and available revenue sources, to include recommendations on long-term solvency. The gas tax would be eliminated if the Commission can provide appropriate alternatives.
Shuster's proposal also codifies the President's One Federal Decision executive order to improve the permitting process by consolidating decision making, and would reduce the permit processing time to no more than two years.
With other priorities on Congress's agenda for the remainder of 2018 and the mid-term elections approaching this fall, the path forward for Shuster's plan is unclear.
NFIP SEES ANOTHER SHORT-TERM EXTENSION
Just hours before the National Flood Insurance Program (NFIP) was set to expire on July 31, Congress sent yet another short-term extension to the President for his signature, authorizing the program through Nov. 30. The amendments to S. 1182 were approved 366-52 in the House, and 86-12 in the Senate; all Pennsylvania House members voted in favor of the legislation, as did Sen. Bob Casey.
The NFIP's last long-term authorization was approved in 2012, and Congress has since passed a series of short-term extensions to keep the program functioning while it continues to work toward a long-term, comprehensive reform package. Several long-term proposals have been offered in both chambers, including the 21st Century Flood Insurance Act, H.R. 2874, which was approved by the House in November 2017 to extend the program through September 2022. However, that bill included an increase in the annual limitation on premium increases from five to eight percent for NFIP policy holders, a provision which failed to gain further consideration in the Senate.
On the Senate side, two major proposals introduced in that body include the Sustainable, Affordable, Fair, and Efficient National Flood Insurance Program (SAFE NFIP) Reauthorization Act of 2017 (S. 1368) and the Flood Insurance Affordability and Sustainability Act of 2017 (S. 1313). The former offers a six-year extension and the latter ten, while also addressing issues relating to premium costs and surcharges to improve the program's fiscal stability. Neither bill has received consideration
DOL ANNOUNCES GRANTS FOR EMPLOYMENT SERVICES/OPIOIDS
The U. S. Department of Labor has awarded grants to six states, including Pennsylvania, under the National Health Emergency Dislocated Worker Demonstration Grant. The program was created to help states provide reemployment services for those impacted by the opioid crisis. Pennsylvania received $4.9 million, which will be split among several local workforce agencies across the commonwealth to help to increase the number of certified recovery specialists and engage employers in recovery-friendly workplace initiatives. Funding will also be used to connect PA CareerLink services to the state Centers of Excellence, as well as to create a Community Resource Pocket Navigator mobile app that will serve as a one-stop directory to link individuals to medical or employment services.
USDA INVITES COMMENTS ON E-CONNECTIVITY PILOT PROGRAM
The U.S. Department of Agriculture (USDA) announced in late July that a comment period is open on the implementation of the e-Connectivity Pilot Program, designed to incentivize private investment in rural broadband development. Service providers, rural electric cooperatives, private firms, non-profits and governmental bodies would be eligible for the funding.
Congress appropriated $600 million for the pilot program in the Consolidated Budget Act of 2018, to be deployed in rural areas with a population of 20,000 or less where current internet service speeds are 10 megabits per second (Mbps) download and one Mbps upload at households. The requirements on build-out speeds are not specified by law and are therefore still under development.
USDA is also seeking input on the rules of the program, specifically how to evaluate a rural household's "sufficient access" to broadband, best options to verify speeds of broadband service to rural households, and best leading indicators of the potential project benefits for rural industries via publicly available data.
The full proposal can be viewed at www.regulations.gov by searching Docket ID RUS-18-TELECOM-0004. Deadline for comment is Sept. 10, 2018.
Relatedly, the auction for $2 billion in Connect America II funding, which supports broadband buildout through Federal Communications Commission (FCC) fees on ratepayers' phone bills, opened on July 24. The FCC has not indicated when winning bids will be announced.