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Legality of using bonds for election machines questioned by state board

  • Emily Previti/PA Post

 Matt Rourke / Associated Press

HARRISBURG – Officials in charge of the funding to reimburse counties for voting machine expenses say they have serious concerns about going through with the plan.

Their concerns are statutory and practical: Is raising money to pay for voting machines within the scope of a bonding agency typically focused on infrastructure projects? And how can the bonds be structured to ensure scores of counties receive the needed funding and, more importantly, pay back the debt?

Lawyers from the Department of Community and Economic Development say the Pennsylvania Economic Development Financing Authority has “broad statutory authority to promote health, safety … and general welfare” — and that extends to election costs.

They also insist that state law does not need to be changed to allow a bond issue for voting machines, as some PEDFA board members have contended. 

But they don’t have many details on how the deal will work yet. 

“We have not even met with any bond counsel,” said DCED Deputy Counsel Carol Longwell told the board during talks Wednesday captured by Roxbury News. “We’ve not even had any meetings to even discuss this potential project.”

In the meantime, counties face a year-end deadline to buy new machines under a state mandate stemming from the settlement of a lawsuit filed in the wake of the 2016 election. The vast majority will have implemented the new systems by the Nov. 2019 general election. 

The lack of answers about how much state money will be made available for voting machines is one more challenge facing county leaders across the state, all of whom are already rushing to deploy new technology while also dealing with mounting concerns about election security.   

“I’m fully supportive of getting this money for the counties,” said board member and state Rep. Ryan Mackenzie, R-Berks/Lehigh, after Wednesday’s meeting. “But if we don’t have the statutory authority, I don’t know how we’re moving forward.”

The debate stems from Gov. Tom Wolf’s veto in July of a bill that tied funding to election reforms. Wolf said he objected to the measure’s elimination of straight ticket voting for a single party. He then announced his intent to use PEDFA bonds to cover new election machinery.

DCED officials have since been assembling a financial team, a process that must comply with timelines and other rules set by state law. DCED was unable to provide anticipated costs or contracts for bonding services when asked this week because the hiring “is still in process,” spokeswoman Casey Smith wrote in an email.

Longwell and Steve Drizos, director of DCED’s Private Financing Center, were also non-committal when asked by PEDFA board members about whether the Department of State would be the recipient of the bond funds.

Rep. Mackenzie says that can’t happen without a change in state law, pointing to this language in the law creating PEDFA:

“no Commonwealth agency under the control of the executive branch shall be a project applicant under this act. Operating expenses

of any Commonwealth agency under the control of the executive branch are not an eligible project cost.”

“Those are all things that we’re going to be working out,” Longwell said at the meeting, adding that “the applicant could very well be in each individual county.”

That scenario would entail a collective application on behalf of all counties, led by one county with a $90 million borrowing capacity or a group of counties with a combined borrowing capacity of the same. The question of which agency would be responsible for making repayments remains unanswered, according to sources familiar with the deal who spoke on background.

“I don’t think any one county would want that responsibility,” said state Sen. Mario Scavello, R-Monroe/Northampton, who’s also on the PEDFA board, later.  “And how is it being distributed down? If I was a county (official), I would want to know I’d be getting those dollars.”

A bond offering involving multiple counties would add to an already complicated financing proposal. And bonding envisioned by Gov. Wolf is intrinsically unique: only two states have previously bonded exclusively and specifically for voting machines, experts say.

Then, there are the questions of authority and purpose.

Board member Liz Prerate Havey, a bond attorney, questioned how voting machine’s fit with PEDFA’s economic development purpose. 

“This is not typically what we see,” she said Wednesday. “If it’s a legal dispute as to whether or not we actually have the authority to issue this, we really need to see both arguments.”

State law spells out possible uses for funding obtained through PEDFA. They include infrastructure, and election systems are considered “critical infrastructure”, Smith said. 

Smith said the goal is to present a plan to the board within the next few weeks at a public meeting where members can ask questions before a separate meeting later in October when they’d be able to ask questions again before voting. 

But Longwell said she “hesitates to promise” that the particulars of the deal will be nailed down by then. 

The board consists of six people appointed by Wolf directly or to government post  that guarantees them a seat. Five were appointed by former Gov. Tom Corbett; one, a former Republican lawmaker. The remaining four are state legislators — a Democrat and a Republican from each chamber. 

Even if PEDFA approves the bond offering, there’s no guarantee any institutions will bite.

 “We’ve had more than one deal thrown in the wastebasket,” Drizos said.


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