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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: November 20, 2017 07:03 PM
From: Representative Dave Reed and Rep. Stan Saylor, Rep. George Dunbar, Rep. Eric R. Nelson, Rep. Sheryl M. Delozier, Rep. Rosemary M. Brown
To: All House members
Subject: Budget Procedures Reform
Over the past 3 fiscal years, it has become obvious that the statutory provisions that govern the Commonwealth’s budget process and guide the executive branch’s management of the budget once it’s enacted are in need of repair. To that end, we are asking you to join us as cosponsors of a legislative package that represents the most substantial budget reforms in a generation.

Document #1

Introduced as HB1940

Description: Closing the loophole that allows an out-of-balance general appropriation act to become law. 

An annual official revenue estimate is necessary to determine whether the state budget is balanced.  The Governor is required to sign an official revenue estimate, which sets the total amount of funds that may be expended in a fiscal year, at the time the General Appropriation Act is signed.  Further, the Governor is required to use a line-item veto to bring the amount appropriated into balance with the revenue estimate.  However, this leaves a loophole in instances where the General Appropriation Act becomes law without the Governor’s signature—a situation that has arisen in both 2016 and 2017.  This bill requires that the official revenue estimate is signed at the time the General Appropriation Act is enacted, regardless of whether the bill is signed, becomes law without the Governor’s signature, or through a veto override.  Further, if the amount appropriated exceeds the official revenue estimate, this proposal would require the Secretary of the Budget to place amounts in budgetary reserve in order to bring the budget into balance.

Document #2

Introduced as HB1941

Description: Limiting the Budget Secretary’s blanket authority to waive lapsing provisions.

Under current law, the Budget Secretary has blanket authority to waive the provisions relating to lapses, encumbrances and major budget categories within amounts appropriated by the General Assembly.  This will be reformed with a more narrow, transparent and accountable ability to manage the Commonwealth’s budget.  This legislation would set a reasonable time limit on the waivers before the funds lapse and return to the State Treasury. Further, this legislation would prohibit using waived funds for the creation of a new or expanded program or initiative.

Document #3

Introduced as HB1942

Description: Ensuring a balanced budget amid revenue shortfalls.

As the 2016-2017 fiscal year progressed, revenue collections lagged the official revenue estimate to the point where the Commonwealth ended the fiscal year more than $1.5 Billion in deficit. To avoid a repeat of this situation, beginning in December of a fiscal year, the Budget Secretary would be required to estimate the amount that revenues for the fiscal year will fall short of the official estimate, and will be required to place that amount in budgetary reserve.  Following the IFO mid-year revenue conference, the Budget Secretary’s estimate will be revised each month, and the amounts in budget reserve will be adjusted according to each month’s revised estimate.

Document #4

Introduced as HB1943

Description: Increased disclosure of information relating to special funds.

While the development of PennWATCH and the State Treasurer’s public transparency portal have made progress in ensuring access to the Commonwealth’s financial data, detailed information relating to programs funded from special funds is not readily accessible.  This legislation would require quarterly reports to be issued by the administration on the amount committed and awarded from special funds that are used to provide grants and subsidies.  This will improve the ability of the legislature to exercise oversight over the funds.

Document #5

Introduced as HB1944

Description: Improving the flow of budgetary information.

One of the challenges to a thorough review of the state budget is the lack of information relating to mandated costs and the Governor’s budget proposals.  To improve this flow of information, this legislation would require annual reports to be provided by the administration on federal and state mandates that apply to appropriations, information about appropriations that are used as federal matching funds, and which are entitlements.  Further, this legislation would require the Governor to present legislative language in the annual budget proposal process, which is intended to address the fact that substantial portions of the Governor’s February 2017 budget proposal were never presented to the legislature in legislative form.

Document #6

Introduced as HB1945

Description: Requiring identification of cost-savings for supplemental appropriation requests.

Each year as part of the budget process, the Governor requests supplemental appropriations for the current fiscal year.  These requests typically reflect payments that legally have to be paid, but the need for these requests can vary, including growth in the need for an entitlement program or an unexpected increased in personnel costs.  This legislation would improve the legislature’s ability to evaluate these requests by requiring the submission of a statement of the need for the supplemental appropriation and recommendations for cost-savings or other reforms which address the cause of the need of the supplemental appropriation.