Legislative Updates: A Weekly Roundup of Federal, State, and Local Actions – June 17 – The Chamber of Commerce for Greater Philadelphia

Your Chamber advocacy team is working to share legislative updates and continue to advocate for your business in Washington, D.C., Harrisburg, and Philadelphia. We’ve created a round-up of recent activity including Key Takeaways for Your Business and a Detailed Legislative Update. This represents our best knowledge of the situation as of 9:00 a.m. on Friday, June 17, 2022.

Chamber members are invited to join weekly legislative update calls hosted by our Advocacy team to hear the latest on COVID-19 relief and recovery efforts at the federal, state, and local level as well as other legislative matters concerning our community.

To learn more about how our region is preparing for recovery, visit our Recharge & Recover PHL Information Hub:

Visit the Recharge & Recover PHL Information Hub

KEY TAKEAWAYS FOR YOUR BUSINESS

Local

Inclusive Growth Coalition Successfully Advocates for Business and Wage Tax Cuts in the FY 2023 Budget Deal

After a sustained lobbying campaign led by the Inclusive Growth Coalition (IGC), supported by the Chamber, City Council gave preliminary approval to reduce wage and business taxes in Philadelphia. The proposed plan includes the following reductions in FY 2023:

Business Income and Receipts Tax (BIRT) – 6.2% to 5.99% (the lowest it has been since 1988)
Resident City Wage Tax – 3.84% to 3.79%
Non-resident City Wage Tax – 3.45% to 3.4%

These are starting reductions the Chamber, IGC, and our partners will be advocating to continue over the next few years.

City Council Stated Meeting
On Wednesday, June 15, 2022, the City Council Committee of the Whole gave preliminary approval to the city’s FY 2023 operating and capital budgets. Bills were reported out of Committee and had First Reading on Thursday, June 16, 2022. These bills will be considered for Final Passage at the next session of City Council on Thursday, June 23, 2022. For more details on the budget deal, see below.

The Council session on Thursday, June 16, 2022, marked Mike Driscoll’s first Stated Meeting as the Councilmember for the 6^th Councilmanic District. The former State Representative won a Special Election in May to serve out the remainder of former Councilmember Bobby Henon’s term, which ends in January 2024.

Councilmember Cherelle Parker introduced a resolution calling for the City of Philadelphia to plan and host annual Historically Black College and University (HBCU) football and/or basketball sporting events similar to the “HBCU Classic” to be hosted by New York City later this year.

On Thursday, June 16, 2022, Bill 220493 (Prevailing Wage Requirements in Airport Operating Agreements) was reported out of Committee and had its First Reading. The bill will be considered for Final Passage on Thursday, June 23, 2022.

Bill 220444 (Redistricting Bill) was approved unanimously by City Council. As a reminder, this redistricting bill addresses the issue of prison gerrymandering. Under the legislation, incarcerated people will be counted as residents in their home Council District rather than in the district where they are jailed.

On Tuesday, June 21, 2022, the City Council Committee in Parks, Recreation and Cultural Affairs will hold a hearing to approve the Rebuild Project Statement for Fiscal Years 2020, 2021, 2022, and 2023.

On Wednesday, June 22, 2022, the City Council Joint Committees on Children and Youth, and Finance will hold a hearing regarding the Philadelphia Parking Authority’s unorthodox and contested request for the School District to repay the Parking Authority nearly $11 million.

The next City Council Stated Meeting will be held on Thursday, June 23, 2022. This is the last City Council Stated Meeting before City Council recesses for the summer.

FY 2023 Budget
City Council has given preliminary approval to a $5.6 billion FY 2023 budget.

After several weeks of budget negotiations between the Kenney Administration and City Council, City Council gave preliminary approval to the deal on the evening of Wednesday, June 15, 2022. Budget highlights include:

Homestead Exemption – increased from $45,000 to $80,000 (the final amount is more than the $65,000 proposed by the Mayor but less than the $90,000 proposed by Councilmembers Johnson and O’Neill);
LOOP Program Funding – increased from $25 million to $35.2 million (more than the $30 million proposed by the Mayor following the reassessment);
Business Income and Receipts Tax (BIRT) – reduced from 6.2% to 5.99% (the lowest it has been since 1988);
Resident City Wage Tax – 3.84% to 3.79%;
Non-resident City Wage Tax – 3.45% to 3.4%;
$15 million for rental assistance;
$1 million for eviction protection and the right to counsel; and
$2.6 million in additional funding for the Free Library of Philadelphia.

In response to the ongoing surge of gun violence, City Council also gave preliminary approval to increase funding to address public safety in neighborhoods. This will include funding to keep recreation centers open on weekends, expand the Community Life Improvement Program (CLIP), enhance street lighting and security cameras, support police recruitment, and other quality of life improvements.

The FY 2023 budget bills will be considered for final approval at the next session of City Council on Thursday, June 23, 2022.

State

Senate Passes CNI Measures
On Wednesday, June 15, 2022, the Pennsylvania Senate passed two bills to cut the state’s Corporate Net Income tax rate. The Senate approved the bills in an effort to take the issue off the budget negotiating table. Reducing the state’s CNI is one of the Chamber’s top legislative priorities in Harrisburg this session.

PA Senate Votes to Block Charter School Regulation
The Pennsylvania Senate passed a concurrent resolution that would block Gov. Wolf’s regulatory changes to the state’s charter school law from taking effect. The Senate chamber passed the House resolution, which now goes to the Governor, who is expected to veto the measure. The House and Senate need a two-thirds majority of each chamber to overturn the veto.

Security Breach Bill Moves
On Wednesday, June 15, 2022, the State Government Committee unanimously approved an amended Senate Bill 696 requiring state agencies and local governments to report a breach of personal information to affected individuals within seven business days.

Federal

The sticking points on the innovation package to date include labor, climate, and trade provisions, which are now expected to be removed from the bills. Instead, negotiators will narrow the focus of the legislation to scientific research, supply chain resiliency, manufacturing and innovation, and semiconductor production, which are stronger areas of opportunity for bipartisan consensus. The Chamber has urged our congressional delegation, especially regional congressional conferees selected to negotiate the final draft, to pass this important legislation. The Chamber is advocating for support of enhanced scientific research investment, clarification of technology hub program eligibility requirements, and reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

FY 2023 Appropriations
The House Appropriations Committee this week released the drafts of 6 of the 12 required appropriations bills for FY 2023. All six bills went through Subcommittee markups and were approved.

DETAILED LEGISLATIVE UPDATE

Local: Updates from Philadelphia’s City Hall

Inclusive Growth Coalition Successfully Advocates for Business and Wage Tax Cuts in the FY 2023 Budget

Business Income and Receipts Tax (BIRT) – 6.2% to 5.99% (the lowest it has been since 1988)
Resident City Wage Tax – 3.84% to 3.79%
Non-resident City Wage Tax – 3.45% to 3.4%

These are starting reductions the Chamber, IGC, and our partners will be advocating to continue over the next few years.

The Inclusive Growth Coalition brought together the diverse Chambers of Commerce in Philadelphia, The Chamber of Commerce for Greater Philadelphia, and small, diverse business owners to speak with one voice in City Hall this budget season.

This is a historic win for the business community, workers, and residents of Philadelphia, but more importantly, a critical move towards inclusive business growth in our city. In order for Philadelphia to stay competitive, retain and attract business and talent, and grow our city’s economy, we need a tax structure that promotes growth, not stifles it. This was not an either-or moment but an opportunity to generate the economic growth that our city critically needs to sustain and thrive as an indisputably world-class place to live, work, and do business.

The Chamber celebrates this victory with our Inclusive Growth Coalition partners.

City Council Stated Meeting
On Wednesday, June 15, 2022, the City Council Committee of the Whole gave preliminary approval to the city’s FY 2023 operating and capital budgets. Bills were reported out of Committee and had its First Reading on Thursday, June 16, 2022. These bills will be considered for Final Passage at the next session of City Council on Thursday, June 23, 2022. For more details on the budget deal, see below.

The Council session on Thursday, June 16m 2022, marked Mike Driscoll’s first Stated Meeting as the Councilmember for the 6^th Councilmanic District. The former State Representative won a Special Election in May to serve out the remainder of former Councilmember Bobby Henon’s term, which ends in January 2024.

City Council postponed voting on the appointments of Sarah-Ashley Andrews and Chau Wing Lam to the Philadelphia Board of Education. Councilmember Isaiah Thomas gave an impassioned speech about the lack of transparency and City Council involvement in the School Board appointment process, and the need for an elected school board with full salaries/benefits and increased accountability for board members. Councilmember David Oh also expressed his disappointment in the School District, lamented the district’s ongoing problems, including non-responsiveness, public safety concerns, and poor performance, and motioned to have the School Board appointments tabled until the School District came to City Council with the requested information. Councilmember Maria Quiñones Sánchez, Chair of City Council’s Committee on Education, agreed to table these appointments until next week to allow the School District to respond to outstanding questions from City Council.

Upcoming City Council Hearings
On Tuesday, June 21, 2022, the City Council Committee on Children and Youth will hold a hearing on a bill that would require the city to provide notice to children in foster care of actions taken with respect to Social Security and other benefits. As a reminder, it was revealed earlier this year that the City’s Department of Human Services had been taking Social Security and other benefits belonging to children in foster care and depositing those funds into the City’s General Fund. This bill would eliminate this currently legal but controversial practice.

On Tuesday, June 21, 2022, the City Council Committee in Parks, Recreation, and Cultural Affairs will hold a hearing to approve the Rebuild Project Statement for Fiscal Years 2020, 2021, 2022, and 2023.

The next City Council Stated Meeting will be held on Thursday, June 23, 2022. This is the last City Council Stated Meeting before City Council recesses for the summer.

FY 2023 Budget
City Council has given preliminary approval to a $5.6 billion FY 2023 budget.

As a reminder, Mayor Kenney’s proposed $5.6 billion spending plan for FY 2023, which was introduced on March 31, did not call for any tax increases but assumed a 4.5 percent (or approximately $33 million) increase in property tax revenues due to planned property reassessments. Under the Mayor’s initial proposal, wage and business taxes would remain the same as FY 2022 levels, despite having made small annual cuts in previous years. The proposed budget also included a fund balance of $153 million, or 2.8 percent of the city’s budget (significantly lower than the city’s goal of 6 to 8 percent of budgeted revenues). Included in the city’s proposed Five-Year Plan is the $1.4B in federal funding the city will receive from the American Rescue Plan. These one-time federal relief dollars will help to ease the effects of declining revenues stemming from the pandemic on the City’s budget. The proposed spending plan, however, included only $334 million of these funds in a conservative effort to sustain a stable and sustainable financial path for the city’s future.

Since the Mayor’s proposed budget was introduced, the Kenney Administration announced that citywide property reassessment found that the aggregate value of all properties in Philadelphia has risen by approximately 21 percent since Tax Year 2020. To reduce the potential impact these rising values may have on residents, the Kenney Administration and Councilmembers proposed tax relief measures for homeowners, including increasing the Homestead Exemption, increasing funding for the Longtime Owner Occupant Program (LOOP), reducing the resident wage tax, and allocating funding for rental assistance and eviction protection.

Homestead Exemption – increased from $45,000 to $80,000 (the final amount is more than the $65,000 proposed by the Mayor but less than the $90,000 proposed by Councilmembers Johnson and O’Neill);
LOOP Program Funding – increased from $25 million to $35.2 million (more than the $30 million proposed by the Mayor following the reassessment);
Business Income and Receipts Tax (BIRT) – reduced from 6.2% to 5.99% (the lowest it has been since 1988);
Resident City Wage Tax – 3.84% to 3.79%;
Non-resident City Wage Tax – 3.45% to 3.4%;
$15 million for rental assistance;
$1 million for eviction protection and the right to counsel; and
$2.6 million in additional funding for the Free Library of Philadelphia.

In response to the ongoing surge of gun violence, City Council also gave preliminary approval to increasedfunding to address public safety in neighborhoods. This will include funding to keep recreation centers open on weekends, expaned of the Community Life Improvement Program (CLIP), enhance street lighting and security cameras, support police recruitment, and other quality of life improvements.

The FY 2023 budget bills will be considered for final approval at the next session of City Council on Thursday, June 23, 2022.

Odds and Ends
On Wednesday, June 15, 2022, Philadelphia Parks & Recreation (PPR), the Office of Transportation, Infrastructure, and Sustainability (OTIS), and international design firm, Design Workshop, announced the launch of the Reimagine the Benjamin Franklin Parkway planning effort. The process, in partnership with the Parkway Council, will last 12-18 months and will include working with the community on creating a public realm plan for people-centric, permanent changes to dramatically improve the appeal, use, traffic safety, functionality, and beauty of the Parkway.

Dr. Tony Watlington officially began his tenure as Superintendent of the School District of Philadelphia on Thursday, June 16, 2022. On his first day on the job, Dr. Watlington announced a 100-day “Listening and Learning” tour across the city that will help him to engage stakeholders, build trust, assess student and staff well-being, teaching and learning, gauge District leadership capacity and alignment, and evaluate District operations, facilities and finances.

Questions? Contact William Carter (wcarter@chamberphl.com) for more information about local legislative affairs.

State: Updates from Harrisburg

Senate Passes CNI Measures
On Wednesday, June 15, 2022, the Pennsylvania Senate passed two bills to cut the state’s Corporate Net Income Tax rate. The Senate approved the bills in an effort to take the issue off the table during budget negotiations.

One bill would reduce the rate by a half-percentage point annually until it reaches 6.99%, costing the state just over $1 billion annually by the 2026-27 fiscal year. The other bill would reduce the rate by a percentage point annually to 6.99% in 2025, then to 5.99% if revenue goals are achieved. That would cost the state an estimated $1.7 billion annually by the 2026-27 fiscal year.

In April, the state House of Representatives passed another CNI bill that has been sitting in the Senate. Members will now reconcile the bills. Reducing the state’s CNI is one of the Chamber’s top legislative priorities in Harrisburg this session.

The regulations, approved by the IRRC in March, set minimum requirements applicants who want to open a charter school would have to disclose on their application. They also would require charter schools to post their non-discriminatory enrollment and student selection policies on their websites. The regulations underscore that charter school officials are subject to the state’s ethics law. In addition, they provide a process for resolving payment disputes between charter and public schools and require charter school employees to have comparable health benefits to those offered by their authorizing school district or the district where the charter school’s administrative office is based.

Security Breach Bill Moves
On Wednesday, June 15, 2022, the State Government Committee unanimously approved an amended Senate Bill 696, requiring state agencies and local governments to report a breach of personal information to affected individuals within seven business days. SB696 would require that state agencies also report information breaches to the state attorney general and local governments and public schools report breaches to the county district attorney. The bill spells out requirements for private contractors regarding information breaches involving government data.

Questions? Contact Liz Ferry (lferry@chamberphl.com) for more information about state legislative affairs.

Federal: Updates from Washington D.C.

Innovation and Competition Bill
Amid growing concerns that a stalled innovation package may fail to pass in this Congress, the White House and congressional leaders have agreed to narrow the scope of the House- and Senate-passed versions, which have not been reconciled for months. Failure to draft and pass a final version ahead of summer recess could put the legislation in serious jeopardy. September session days will be limited, with a looming FY23 spending deadline on September 30. Congressional members will be eager to return home to campaign ahead of the midterm elections in October. Beyond the election, the lame-duck session is expected to have many competing and pressing legislative items. Even more, if Republicans pick up significant seats in Congress after the election, they may also choose to punt the innovation bill into the next Congress with better margins and possible majority control.

The sticking points on the innovation package to date include labor, climate, and trade provisions, which are now expected to be removed from the bills. Instead, negotiators will narrow the focus of the legislation to scientific research, supply chain resiliency, manufacturing and innovation, and semiconductor production, which are stronger areas of opportunity for bipartisan consensus. The Administration and Democrats concede that any legislation that eventually passes both chambers will closely resemble the United State Innovation and Competition Act that passed with significant bipartisan support in the Senate almost a year ago. The House’s America COMPETES Act, on the other hand, passed primarily along partisan lines.

The Chamber has urged our congressional delegation, especially regional congressional conferees selected to negotiate the final draft, to pass this important legislation. The Chamber urges support for enhanced scientific research investment, clarification of technology hub program eligibility requirements, and reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

FY2023 Appropriations
The House Appropriations Committee this week released the drafts of 6 of the 12 required appropriations bills for FY2023. All six bills went through Subcommittee markups and were approved. Bill text to the approved appropriations bills is provided below:

The remaining schedule for marking up fiscal year 2023 appropriations bills is listed below. Typically, draft language is released at least 24 hours in advance of the scheduled markup.

Subcommittee Markups:

Tuesday, June 21: Interior, Environment, and Related Agencies; Energy and Water Development, and Related Agencies
Wednesday, June 22: State, Foreign Operations, and Related Programs; Commerce, Justice, Science, and Related Agencies
Thursday, June 23: Transportation, and Housing and Urban Development, and Related Agencies; Labor, Health and Human Services, Education, and Related Agencies

Full Committee Markups:

Wednesday, June 22: Defense; Legislative Branch
Thursday, June 23: Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; Military Construction, Veterans Affairs, and Related Agencies
Friday, June 24: Homeland Security; Financial Services and General Government
Tuesday, June 28: Energy and Water Development, and Related Agencies; Interior, Environment, and Related Agencies
Wednesday, June 29: State, Foreign Operations, and Related Programs; Commerce, Justice, Science, and Related Agencies
Thursday, June 30: Transportation, and Housing and Urban Development, and Related Agencies; Labor, Health and Human Services, Education, and Related Agencies; Subcommittee Allocations

Odds and Ends
A bipartisan group of twenty senators, including Senators Cory Booker (NJ), Chris Coons (DE), and Pat Toomey (PA), reached an agreement on a framework for a gun-control bill. The White House, as well as key Democratic and Republican leaders, are supportive of the framework. However, Republican leadership has warned that continued support will depend on the legislative language to be drafted in the days to come. The framework includes:

Funding for State administration of red flag laws
Funding for mental health services and school safety
Expanded background checks to include domestic violence abusers
Tighter restrictions on the selling of firearms illegally
Crackdowns on illegal straw purchases and gun trafficking

Questions? Contact Anselm Sauter (asauter@chamberphl.com) for more information about federal legislative affairs.

WE’RE HERE FOR YOU, YOUR TEAM, AND YOUR BUSINESS

The constantly changing nature of this public health crisis requires continued engagement with public policy developments. We invite you to reach out to our advocacy team directly with your questions:

Anselm Sauter, Federal Affairs – asauter@chamberphl.com
Liz Ferry, State Affairs – lferry@chamberphl.com
William Carter, Local Affairs – wcarter@chamberphl.com

To learn more about how our region is preparing for recovery, visit our Recharge & Recover PHL Information Hub:

Visit the Recharge & Recover PHL Information Hub

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Advocacy

Initiatives