00:00 - The following program is sponsored in part by customers

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00:12 - Welcome to journalists roundtable.

00:14 - I'm Ellen Frantz. Our guests today

00:16 - are Zach Hoopes, government and politics reporter with PennLive.

00:20 - And Anna Janella, editorial assistant and news aggregator with Capital Wire.

00:24 - State affairs.

00:24 - Thank you both for joining us today.

00:27 - Anna, we're going to start with you, and we're getting closer

00:29 - to the state budget deadline on June 30th.

00:31 - What have you heard about how negotiations are going?

00:34 - Yeah.

00:34 - So I think there's definitely a lot of pressure because last year,

00:38 - the budget was passed 135 days late.

00:41 - And so there is a lot of pressure from lobbyists,

00:44 - because in that 135 days in passed, a lot of organizations

00:50 - didn't get their funding.

00:51 - So a lot of lobbyists are putting the pressure on legislators

00:55 - to pass the budget.

00:57 - And it's kind of hard to say, even though it's

00:59 - almost two weeks away or less than two weeks away now.

01:02 - Exactly. If it'll get passed.

01:04 - The Senate was out of session this week,

01:07 - and the House of Representatives stayed like a half week.

01:10 - So, I mean, we're hopeful.

01:13 - There's definitely negotiations going on, but,

01:16 - you know, who knows if it'll get passed on time?

01:20 - I think the America 250 celebrations for a lot of, especially the Philadelphia,

01:24 - legislators may, you know, affect the timeline.

01:29 - But we're hoping that we'll hear something soon.

01:33 - And we usually do get a had a heads up before

01:37 - things get really close to coming to a decision.

01:40 - With it being an election year.

01:41 - Do you think that will motivate lawmakers to move a little quicker on

01:44 - the budget this year?

01:46 - Absolutely.

01:47 - I think.

01:47 - I think in general, looking at, the session meetings,

01:52 - with the different committees throughout the House and Senate

01:55 - in the past couple of weeks.

01:57 - A lot of legislators are trying to flex their, their legislative muscles

02:01 - and, you know, speak during meetings, push bills

02:05 - that they've been working on for a while that might have been stalled.

02:08 - So I think having a presence in the Capitol for legislators who are running

02:14 - is really important, especially if they are in a more contested race.

02:18 - So, yeah, what have you heard?

02:20 - I think Blake and I said the conventional wisdom typically is that,

02:23 - an election year puts

02:25 - some additional pressure to get the budget done sooner

02:27 - because people want to get out and campaign.

02:29 - And not having a budget done as you get closer to November looks increasingly bad.

02:34 - At the same time, I would also say

02:37 - the dynamics that held up last year's budget haven't really changed.

02:41 - They're the same things that exist.

02:42 - This year, the governor is asking

02:44 - for the same stuff that he hasn't gotten for the last two years.

02:48 - Some of the divisions within the caucuses,

02:52 - are really the same.

02:54 - Some of those things that have prevented, certain pieces

02:57 - of the budget moving in years prior are still there.

03:01 - And we've been also been seeing that in recent weeks.

03:03 - So there's additional pressure.

03:05 - But I don't know that, the issues that have held things up

03:09 - before haven't substantively changed from where they were even six months ago.

03:14 - I mean, we're not that far away from the November budget passage last year.

03:20 - So it will be interesting.

03:23 - I think it's one of those things where when it breaks, it will just kind of

03:27 - come open because people will have, have had enough

03:31 - and decided that they have to get back out and campaign realistically.

03:36 - You were talking about some of these issues

03:38 - that have not been resolved from the last budget.

03:41 - One of them, the past three years.

03:43 - Governor Josh Shapiro

03:45 - has wanted to tax kill games as a way to bring in more revenue, for the state.

03:49 - Every budget proposal, he's mentioned it.

03:51 - The Supreme Court just heard a case regarding skills games,

03:54 - because you talk a little bit about what that case was and what the verdict was.

03:58 - Well, the outcome of that case is that the Supreme Court found that skill

04:02 - games can be considered slot machines under certain parts of the law.

04:06 - And that's different than what lower courts had ruled.

04:10 - Going back many years,

04:13 - they had found that skill games because there was

04:15 - an element of skill involved, couldn't be considered slot machines.

04:18 - And that also prohibited, law enforcement

04:21 - from seizing the devices, which they had many years ago.

04:25 - Under the idea that they were illegal slot machines.

04:28 - The Supreme Court is now saying that you can't actually consider them

04:32 - slot machines.

04:33 - And they could hypothetically be seized.

04:36 - Now that order has been stayed for 120 days.

04:40 - So that puts, the legislature and,

04:45 - you know, gas station owners, bar owners,

04:48 - the manufacturers of skill games, that puts them in kind of an awkward spot.

04:52 - Now, the case has been remanded

04:54 - back to the Commonwealth Court to fix some of the problems with it.

04:57 - And within 120 days, something will have to happen.

05:01 - That could either be that police just start seizing these machines

05:05 - because they are now considered illegal slots.

05:08 - More likely,

05:08 - what that means that the legislature will have to pass some sort of bill.

05:12 - And the governor will have to sign it to legitimize

05:15 - the machines, in effect, and make them legal.

05:20 - And that will almost certainly involve some type

05:23 - of increased regulatory oversight and a much higher tax rate.

05:28 - The casinos, as well as the governor, have been pushing for,

05:34 - skill games to be taxed on par with slots, which is a 50 some percent tax rate.

05:39 - Peso matic, which is the, manufacturer

05:44 - of most of the skill games in the state, has been pushing against that.

05:47 - They want to keep the games much, at a much lower tax rate.

05:52 - So the clock is essentially now ticking to come up with a solution,

05:58 - because removing all of these machines would be very difficult logistically.

06:04 - I think Attorney General Dave Sunday estimates there's

06:07 - 70,000 of them in the state, and they're spread everywhere.

06:13 - So if that deal comes

06:15 - through, it would be significant for the budget.

06:18 - In terms of generating some revenue, although it wouldn't

06:22 - entirely close the budget gap that now exists.

06:25 - It would allow the legislature to tick off something that

06:29 - they've been trying to do for a long time, but haven't been able to do,

06:33 - which is come to an agreement on these things.

06:36 - You there's been kind of an evolution where there were a lot of Republicans

06:41 - who were very reluctant to regulate and tax these devices just because they didn't

06:47 - want to be perceived as implementing, any kind of tax increase.

06:53 - But you're now seeing increased concerns with public safety, with these

06:56 - sort of mini casinos cropping up that have had some crime issues.

07:00 - There's a lot of impetus to do it.

07:03 - It's just sort of, devil's in the details situation where you have to really see

07:09 - exactly how they're going to be regulated,

07:11 - exactly what the tax rate is going to be before you can get people together.

07:15 - I think it probably will be a certain faction of legislature legislators

07:18 - that simply don't want to go with a hefty tax rate.

07:21 - There's going to be a portion of legislators that one very heavy

07:25 - regulation.

07:27 - I don't know that you're ever going to get everybody on board

07:29 - with a possible solution to skill games, but with a Supreme Court decision

07:34 - and 120 day timeline, it's kind of lit a fire.

07:39 - Because you do have this deadline coming, that could potentially mean

07:44 - that you have 70,000 illegal gambling devices spread throughout the state,

07:48 - which would kind of just be a nightmare scenario.

07:51 - Now, Anna, you wrote about how school choice

07:53 - advocates are feeling about Governor Shapiro's budget proposal this year.

07:57 - What is in the proposal regarding school choice?

07:59 - Yeah.

08:00 - So I think the big thing for school choice advocates is the education tax credit.

08:05 - So, what that is, is basically,

08:09 - different organizations who provide

08:11 - scholarships, to students, to go to different,

08:17 - like private or charter schools outside of their district.

08:21 - So not public schools.

08:23 - They, these organizations would get a tax credit

08:27 - for offering those scholarships to different students.

08:31 - And so what school choice advocates are hoping for in this budget

08:36 - is an increase in funding for those, tax credits.

08:41 - And I think, generally

08:43 - what the argument is, Republicans are the ones advocating for school choice

08:50 - because, you know, they were very integral in forming

08:54 - charter schools and advocating for charter schools.

08:57 - Whereas Democrats

08:59 - are typically going to be advocating for additional funding for public schools.

09:03 - So we see, Shapiro's budget right now

09:06 - is, you know, the focus on public schools.

09:09 - You know, his campaign is focusing on free school breakfasts and lunches.

09:14 - So, we're we're kind of seeing that he,

09:18 - he doesn't have the focus on school choice,

09:23 - which, you know, advocates are hoping for.

09:27 - So I think, a lot of advocates

09:29 - are, are lobbying this year about,

09:33 - getting their those tax credit refunds in the budget.

09:38 - It's not something.

09:39 - Shapiro has entirely neglected.

09:42 - However, it doesn't seem like it's been at the top of his agenda.

09:47 - And I think a lot of other people

09:49 - who are advocating for school choice would probably agree with that.

09:52 - You wrote that this year's budget quote, prioritizes increased public school

09:56 - funding over continued support for EitC programs and, quote,

10:01 - can you explain what it is and the difference

10:03 - between that and the governor's proposed plan for school choice?

10:07 - Yeah.

10:07 - So the EitC year, the educational income tax credit,

10:12 - is that tax credit that, you know, school

10:16 - or different organizations will provide that scholarship to students

10:20 - and then get a tax credit for providing

10:23 - that scholarship, as like a donation.

10:26 - And, you know, that scholarship could go to tuition

10:29 - or different educational needs for those students.

10:32 - So that they can have success, at a nonpublic school.

10:38 - So, that that is different than providing funding to a public school

10:43 - where, you know, students are able to go for free.

10:47 - You don't need a scholarship to go to public school.

10:51 - But something that is kind of on the table with the, the tax credit is

10:57 - there's, federal tax credit that has been introduced.

11:01 - And a lot of neighboring states, including Ohio

11:04 - and New York, are either already opted in or planning to opt in.

11:09 - But Shapiro has been kind of quiet on what he's deciding to do with that.

11:13 - And, different Republican legislators

11:15 - in the state are putting the pressure on him to make a decision.

11:19 - Because the deadline's approaching.

11:21 - But, it is kind of up in the air.

11:23 - It's kind of something that Shapiro is skirting around, but that federal money

11:29 - would relieve the state from having to provide more money

11:33 - in the tax credits for those organizations that I was just talking about.

11:37 - So that's definitely something to keep an eye out,

11:40 - going into his election as well, because a lot of voters,

11:44 - I think had that in the back of their mind.

11:46 - What what is Shapiro's take on school choice

11:49 - and he's mostly been pretty mum about it this past year.

11:52 - So, yeah,

11:54 - I also just another bit of backstory.

11:57 - The governor is very bullish.

11:59 - When he first got in office on a school voucher

12:02 - program, which school choice advocates really love?

12:05 - And that proposal

12:08 - almost made it into the budget and then crashed and burned.

12:12 - And since then, he hasn't

12:16 - really been like an A said, as,

12:21 - as vocal about, some of the school choice stuff.

12:25 - The, the ITC is

12:28 - something that the state has expanded, over many, many years.

12:32 - But, I think, like you saw with the school vouchers,

12:35 - there's increasing pushback, particularly amongst Shapiro's

12:40 - fellow Democrats, toward things like that.

12:44 - And when it comes to the ITC, that's a tax credit.

12:49 - That is, used by businesses that donate the scholarship funds.

12:54 - It's claimed, or

12:56 - you will hear folks say that it is claimed

13:00 - by a relatively small number of very wealthy donors.

13:05 - Jeff Yass, his name gets invoked a lot when it comes to the ITC.

13:09 - There are also relatively limited oversight, elements

13:15 - to it, to make sure that the tax credit is actually going to kids, that need it.

13:19 - So it's a lot of those things have increasingly

13:23 - soured, amongst Democrats.

13:26 - And you kind of saw the blow up with school vouchers.

13:29 - And since then everybody has kind of retreated to their corners.

13:33 - And you haven't seen a whole lot.

13:37 - I think is probably the genesis of what you're seeing now.

13:41 - Now, to switch topics, you both wrote

13:43 - about, of recent legislation about, transgender

13:47 - girls and women's sports going through the house.

13:52 - Anna, you

13:53 - wrote that the Democrats or the Republicans were unhappy

13:56 - with Democrats for stalling legislation on transgender athletes.

14:00 - What did the Democrats do with this?

14:02 - Yeah. So great question.

14:03 - Essentially what's what's happening is the the the Senate bill,

14:08 - Senate Bill nine,

14:10 - and there's two accompanying House bills that have generally the same language,

14:14 - has been kind of passed around from,

14:17 - House committee to House committee.

14:19 - So I don't remember the exact order, but it's been in the health committee, it's

14:23 - been in the Children and Youth Committee, it's been in the education Committee.

14:28 - And, what's happening is

14:30 - each time it's referred to another House committee,

14:35 - there's a motion to bring it to a vote to bring

14:38 - to they're voting on it, to bring it into the committee.

14:41 - And because the Democrats have control of the House,

14:45 - they're not wanting to they're kind of swaying that vote

14:49 - of bringing this bill into their committee for consideration.

14:52 - So it keeps failing the vote to bring it in to these different committees.

14:58 - And so it's kind of just been bouncing around.

15:01 - And, Republicans are really frustrated about the situation

15:05 - because, you know, it's a big culture point for them.

15:09 - And like I mentioned before, with the midterms coming up,

15:14 - it's it's big for Republican legislators to be able

15:18 - to give their point of view on this, which is an important issue for some voters.

15:23 - So I think, that's kind of where the frustration is among

15:28 - Republicans that Democrats are kind of refusing to take it on.

15:32 - For the most part, Democrats haven't really said

15:36 - much on the topic during committee meetings.

15:41 - But you know,

15:43 - Chairman Frankel, the chair of the health committee this week, he

15:47 - he basically said we need to focus more on,

15:51 - like, health care, working families.

15:54 - In his mind, more pertinent issues

15:58 - going into this, the budget negotiations.

16:01 - So I think that's kind of the sentiment that a lot of Democrats

16:04 - share, when, when discussing these bills.

16:08 - But that's what I've observed.

16:10 - Yeah. Zach, what have you heard?

16:11 - So Lincoln has said, there's a couple of bills.

16:16 - I think it's four now.

16:17 - Actually, two in the House, two from the Senate,

16:20 - that have been bounced around between committees.

16:24 - They're all effectively the same bill that would say that,

16:28 - male to female transgender girls can't compete as girls.

16:34 - By re referring the bills, what Democrats are doing

16:39 - is avoiding a discharge petition, because under the House rules,

16:43 - if a committee has had a bill for 15 days and hasn't done anything with it,

16:47 - the the other members

16:51 - can file a petition and vote on that petition

16:54 - to force the bill out of committee and back to the full House floor.

16:58 - It used to be that a discharge required people from both parties.

17:03 - Now can only be it now can be done with just one party.

17:06 - And that was a rules concession that Republicans got two years ago.

17:12 - So Republicans now

17:13 - have the ability to unilaterally try to discharge these bills.

17:16 - The only way for Dems to prevent the bills from getting out of committee is to just

17:21 - re refer them to different committees, and that resets the 15 day clock.

17:29 - Like in a said,

17:32 - there's a sense that Republicans feel

17:35 - this is a culture war issue that's on their side.

17:38 - They will often say,

17:40 - various polls, but you'll see anywhere from 60

17:42 - to 80% of Americans agree with them on this.

17:46 - They want the bills to come up for a full vote.

17:51 - Dems would obviously rather avoid this.

17:53 - So they just keep re referring the bills.

17:58 - The risk, I really don't know.

18:02 - I mean, if if you were to somehow get a full floor vote,

18:05 - I don't know how it go.

18:07 - There are a couple Dems that may vote for something like that.

18:10 - I think that's a general sense.

18:12 - Is that those bills might pass if they got the full floor

18:16 - and then it would head

18:16 - to the governor's desk, and then it would put Shapiro in an awkward position.

18:20 - So the way to prevent that is to just re refer the bills

18:24 - and just say, we're still thinking about it.

18:26 - We need another committee to look into this aspect of the bill.

18:28 - And eventually you just run out the clock.

18:32 - I wanted to ask you about some more, pieces of legislation

18:35 - that recently came before the state legislature.

18:38 - Zach, last week, the House approved legislation to tax tech

18:42 - giants ad platforms.

18:45 - Which platforms are included in this bill and how much is the tax?

18:48 - It would extend the state's 5% gross

18:52 - receipts tax to digital advertising.

18:55 - And that would include basically

18:58 - any ad that you see as a user in Pennsylvania

19:01 - through social media or any kind of online marketing, as long as you're seeing it

19:07 - on an internet connection and Pennsylvania would be subject to the state's tax,

19:12 - it would predominantly hit

19:14 - a small number of very large tech companies

19:16 - just because they have cornered the market, in a lot of digital targeted ads.

19:23 - Meta, which owns Facebook and Instagram,

19:26 - Amazon, Google, and maybe a handful of others.

19:30 - But those are the big three.

19:33 - It's been an idea to raise

19:35 - revenue that's been bounced around for a while.

19:39 - Estimates are like a half a billion

19:42 - a year, maybe three quarters of a billion a year.

19:45 - After a while,

19:47 - it was something that kind of started with some more progressive Democrats

19:52 - and then became a little more mainstream over time.

19:56 - Just as a way to raise money that didn't hit most people.

19:59 - It was the tax is targeted toward a handful of very large corporations.

20:05 - Whether or not that it's actually a viable idea

20:08 - in terms of the full state budget.

20:11 - Remains to be seen.

20:13 - I think Republicans, particularly the Senate, are still going

20:16 - to be very skeptical of something like that.

20:20 - Democrats

20:20 - did just a week or two ago in this past,

20:24 - try to make it more palatable for Republicans

20:27 - by saying that the money in the latest version of the bill, the money raised for

20:31 - that tax would be dedicated toward a property tax relief fund for seniors,

20:36 - which is something the state already does, with some gaming revenue.

20:40 - But this would greatly expand the state's ability to,

20:44 - essentially discount

20:46 - property taxes for, for senior citizens.

20:49 - That close the bill to get a little more Republican support

20:52 - than it probably would have gotten, just as a straight up tax.

20:56 - But we'll see if it goes anywhere.

21:00 - And you wrote about a, another bill

21:02 - that passed the House, to protect snap recipients from card skimming.

21:07 - Can you talk about what card skimming is

21:08 - and how big of a problem it is here in Pennsylvania?

21:10 - Yeah, absolutely.

21:11 - So card skimming is essentially there are criminals

21:15 - who are putting devices on top of, point of sale,

21:21 - you know, card readers

21:23 - and, what it really does is effect swiping and inserting cards,

21:28 - and that information is stolen from the card and then taken

21:33 - by those criminals to take the credit card information, debit card information.

21:38 - But now we're seeing that it's affecting, EBT

21:41 - cards and snap snap recipients.

21:44 - So, I believe last year there were $15 million in Snap

21:48 - funds stolen, according to, I think, the attorney general's office.

21:52 - So this is definitely a very relevant issue right now.

21:57 - And most credit and debit cards already have chip technology.

22:01 - So it's it's according to this one through the bill.

22:06 - Because there's a House bill that is implementing that chip.

22:10 - And I think the,

22:13 - the impetus to get it done quickly because it was just passed

22:17 - by the Human Services Committee, the House.

22:19 - Human Services Committee, and then just passed by the full House this week.

22:23 - So they're trying to hit this

22:26 - October 1st deadline where, if they make this deadline about,

22:32 - I think 50% of the funds will be, you know,

22:37 - I don't know I don't know what the right word would be, but,

22:42 - the federal government would assist with 50% of those funds.

22:45 - So there definitely is a push to get this bill fully passed, by October 1st.

22:51 - And then there's also, a Senate bill.

22:54 - And that bill is focusing more

22:56 - on the criminal punishment for people who,

23:01 - are skimming Snap benefits

23:04 - and just increasing the the penalties

23:07 - for those who steal from our, our country or.

23:11 - Sorry.

23:12 - Well, our country and our state's most vulnerable people.

23:15 - For the House bill 2540 representative

23:21 - Dan Williams of Chester, he kind of was saying

23:25 - this is also a really good thing for taxpayers

23:29 - because it secures those benefits, from getting stolen.

23:34 - And, so it really just it helps all parties.

23:37 - This is a bipartisan supported bill.

23:39 - It passed the House completely unanimously.

23:44 - Representative Doyle Heffley of Carbon is the co-sponsor on this, this House bill.

23:48 - So there's definitely, like, unanimous support for it.

23:52 - And, I know it'll be at the Senate floor very soon.

23:56 - We only have a few minutes left.

23:57 - Zach, what is some piece of legislation that you've been reporting on that

24:01 - you think should be of important note to our viewers?

24:04 - Oh, gosh.

24:08 - There was, I think most recently there was a bill

24:11 - that ran to, make, advertisements tell you when they're AI generated,

24:17 - which I think is a lot of, on a lot of people's minds, especially

24:23 - now, there,

24:27 - there's also some things coming up with, data centers.

24:31 - I think there's probably going to be a, a brewing

24:35 - or already is a brewing fight over that.

24:38 - And how best to, control

24:42 - those and how essentially harsh you want to be.

24:46 - Do you want to implement some kind of moratorium?

24:49 - Do you want to yank their tax credits, which you've seen some people,

24:53 - talking about?

24:53 - I there's a number of bills,

24:57 - floating around about that.

24:58 - And I think it's probably something that is,

25:01 - almost certainly going to be part of budget discussions.

25:05 - Trying to think of,

25:10 - other, big ticket items recently.

25:15 - There was also a somewhat interesting,

25:20 - move in the Senate,

25:24 - which wasn't in this week, but was in last week,

25:28 - on, a bill

25:32 - that would create a cannabis control board that would essentially assume,

25:37 - it would strip the Department of Health of its powers

25:40 - to regulate medical marijuana and transfer it to this new board.

25:44 - That new board would also have the job of regulating

25:47 - recreational marijuana if it were to be legalized.

25:51 - That bill and it's the first time

25:53 - I've seen this, that bill was called up on the Senate floor and then failed.

25:57 - It was voted down, which is exceedingly rare.

26:01 - The story that you got, from,

26:07 - the sponsor, Dan Laughlin, was that he believed

26:11 - there was going to be more support among Democrats than there was, Lockman.

26:15 - As a Republican, he's acknowledge that there is a certain faction

26:19 - of his own caucus that is just not going to be supportive of anything

26:23 - that could even lead in the future to marijuana expansion.

26:27 - But most Democrats also opposed the bill.

26:31 - The administration, the governor was also not supportive

26:36 - of the bill, basically,

26:37 - because it would strip power from his own agencies and transfer it to,

26:41 - a board that is largely appointed by the legislature.

26:46 - That was a very unusual

26:48 - move, simply to see something like that get voted down.

26:52 - And I think it points to the difficulty

26:54 - in crafting any kind of marijuana legislation.

26:57 - Because this is Bill Ward not actually talking about full legalization.

27:02 - We're just talking about something that could help legalization in the future.

27:06 - And it's ready to go.

27:08 - And then at the last minute, it gets tanked by the administration

27:13 - coming out against it, infighting within Senate Republicans.

27:17 - And, you know, it blows up,

27:21 - that sort of thing that usually happens behind the scenes.

27:24 - But we got to see it happen, you know, on the live stage.

27:29 - And it just kind of points to how difficult this stuff can be.

27:32 - All right.

27:33 - That's going to have to be our last word.

27:34 - Our guests today have been Zach Hoopes, government and politics reporter

27:38 - with PennLive, and Anna Janella,

27:40 - editorial assistant and news aggregator with Capital Wire State Affairs.

27:44 - Thank you both for joining us.

27:46 - That's it for this episode of Journalists Roundtable.

27:49 - I'm Ellen Francis. Thanks for watching.