30
May
2025

Pennsylvania's General Assembly Faces a Crucial Budget Season

New legislation seeks to streamline the management of abandoned vehicles at auctions, impacting dealers and storage fees significantly.

Pennsylvania's General Assembly Faces a Crucial Budget Season

The Pennsylvania General Assembly is entering into its most critical month of June when they must pass a balanced budget by June 30th. In addition to the state budget, there are various bills (i.e., Fiscal Code; the Administrative Code; Education Code; the Human Services Code; etc.) that are all part of the budget implementation that move as a package.

Pennsylvania collected $6.2 billion in General Fund revenue in April, which was $363.2 million, or 6.2 percent, more than anticipated. Fiscal year-to-date General Fund collections total $39.4 billion, which is $328.8 million, or 0.8 percent, above estimate.

With the state in need of cash, the Independent Fiscal Office (IFO) estimates that it will be forced to deplete its $2.9 billion General Fund surplus by the end of Fiscal Year 2024-25. Largely due to updated projections for Department of Human Services (DHS) programs reflected in the Executive Budget, the IFO’s updated FY 25-26 deficit projection is $6.0 billion under current laws and policies. The FY 24-25 deficit projection is unchanged as revenues continue to meet expectations.

As a reminder, Governor Josh Shapiro’s $51.5 billion budget proposal is nearly $3.9 billion more than the approved 2024-25 budget. To adopt the governor’s budget proposal, the state would be required to use the last of its surplus and take about $1.6 billion out of its Rainy Day Fund as well as enact two new taxes to pay for the proposed budget. The governor said the legalization of marijuana for recreational use by adults is projected to bring in $536.5 million in revenue in the first fiscal year and a tax levied against 30,000 skill games and VGTs would bring $368.9 million into the state’s general fund during its first year with another $40 million deposited directly into the lottery fund.

With respect to transportation, the governor’s budget proposal increases the transfer of all Sales and Use Tax receipts to the Public Transportation Fund by 1.75 percent to provide an additional $292.5 million into mass transit in 2025-2026 and growing to more than $330 million in 2029-2030. In addition, it reduces reliance on the Motor License Fund to supplement the Pennsylvania State Police by $50 million a year until it is completely removed in 2029-2030.

We expect a very acrimonious budget season this year, as the Senate Republicans prefer to reduce spending and not deplete the Rainy Day fund. Therefore, reaching an agreement between the four legislative caucuses of the General Assembly and the Governor may require great compromise and concessions; otherwise, we understand that an alternative plan may include passing a bare bones budget to keep state government operating and push the bigger issues like gaming, recreational marijuana, and mass transit funding to the fall.

Unfinished Business on Industry Supported Legislation
As the General Assembly works on a state budget, other issues are also addressed and move through the legislative process, but, with divided government (House controlled by the Democrats and the Senate controlled by the Republicans), the wheels of government often move a slower pace.

Modifying Management of Abandoned Vehicles at Auction
House Bill 373i (Schmitt-R) amends Title 75 (Vehicles), authorizing a wholesale vehicle auction, or salvor, to begin the process to remove vehicles that have been abandoned at the wholesale auction without the wholesale auction’s consent. It would also authorize the wholesale auction to charge and collect storage fees as well as the releasing or recovering costs of the abandoned vehicle.

Specifically, the proposed legislation requires the wholesale vehicle auction to file a report, outlined in existing law at § 7311.1 (a), with the local police department declaring that an unauthorized vehicle has been left unattended on private property for a period exceeding three business days. If the wholesale vehicle auction elects to file such a report, it may remove, sell, or legally obtain the ownership and title of a vehicle that is declared an abandoned vehicle by PennDOT.

The wholesale vehicle auction shall be reimbursed for all applicable costs related to the storage and processing of the vehicle from the proceeds of the sale of the vehicle. The remaining proceeds of the sale shall be paid to PennDOT and transmitted to the State Treasurer for deposit in the Motor License Fund.

In addition, if the wholesale vehicle auction does not intend to sell or legally obtain ownership of an abandoned vehicle, existing law at § 7311.1 (c) (Salvors) provides that an abandoned vehicle can be towed to a salvor’s property and the salvor may elect to file a report with the local police department.

This legislation was referred to the House Judiciary Committee on January 31, 2025.

Requirements for Sale of Scrap Materials/ Stopping Catalytic Converter Robberies
House Bill 612ii (Isaacson-D) amends the Scrap Material Theft Prevention Act (Act 113 of 2008) to place additional requirements on scrap processors and recycling facility operators who purchase catalytic converters or scrap material that bears a name or mark under Title 54 Chapter 15 (reusable marked articles and receptacles).

Under this legislation, scrap processors and recycling facility operators would be required to collect identification information if the scrap material bears a name or mark. The legislation imposes a new penalty for a scrap processor or recycling facility that fails to collect the required information. An individual who violates this section would be guilty of a misdemeanor of the third degree. Moreover, it sets the minimum fine for a conviction at $5,000 and a misdemeanor of the third degree is punishable by imprisonment not to exceed one year.

The legislation was referred to the House Judiciary Committee on February 20, 2025.

Allowing In-Person Pickup for Dealer Plates and Inspection Stickers
House Bill 650iii (Kutz-R) amends Title 75 (Vehicles), in registration of vehicles, further providing for use of dealer registration plates; and, in inspection of vehicles, providing for duty of department.

This legislation requires PennDOT to operate and maintain numerous in-person locations where an auto dealer may physically obtain dealer registration plates and PA licensed inspection stations to physically obtain inspection stickers.

Specifically, it would require PennDOT to open at least five in-person locations, spanning the different regions of the Commonwealth. The legislation would also require PennDOT to maintain a minimum number of set office hours at these locations to ensure our businesses get the help they need from their partner government agency.

The legislation was referred to the House Transportation Committee on February 20, 2025.

The status of the above legislation can be found on the Pennsylvania General Assembly’s website at: https://www.palegis.us/.

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