Down to the wire: State lawmakers take up budget again as deadline looms
June 30, 2014 7:03 AM
Pennsylvania Governor Tom Corbett
By Kate Giammarise and Karen Langley / Post-Gazette Harrisburg Bureau
HARRISBURG -- Senate Republicans on Sunday turned from an earlier openness on using taxes to close a state budget shortfall, sending toward the floor a trimmer spending plan than Gov. Tom Corbett proposed earlier in the year.
At $29.1 billion, the state general fund would be hundreds of millions of dollars smaller than Mr. Corbett called for in February, before months of poor revenue collections left Pennsylvania facing a budget gap of well more than $1 billion.
The Senate and House are expected to take up the proposal today with hopes of delivering the general appropriations bill to Mr. Corbett by the start of the new fiscal year at midnight.
Minority Democrats derided the plan, passed on a party-line vote, as based on overly-rosy revenue projections and too many one-time fund transfers.
"We believe this is made up of projected revenues that simply aren't going to materialize," said Senate Minority Leader Jay Costa, D-Forest Hills.
The proposal, which Republicans negotiated behind closed doors, relies on revenues such as transfers from various funds, limited leasing of state forest and park land and a shortening of the holding of unclaimed property to balance the state's books for the fiscal year that starts Tuesday.
It does not include a severance tax on natural gas drilling or increases in tobacco taxes, mechanisms that members of the Senate Republican caucus and Corbett administration had discussed in recent weeks.
It also does not include funds from the privatization of liquor sales, as some House Republicans had strongly advocated.
It restores about 13 state tax credit programs that the House cut last week as part of its budget bill.
The plan includes some increases in education funding, according to the Senate Appropriations Committee.
Sen. Jake Corman, R-Centre, chairman of the appropriations committee, said his chamber could have supported a budget with recurring revenues, but such a proposal "wasn't going to get through the House and the governor."
House Speaker Sam Smith, R-Jefferson, said Sunday afternoon that any momentum toward enacting a severance tax or increasing tobacco taxes had ebbed.
"Those things have been drifting away from the center for a little bit," he said. "As much talk as there is, it really didn't look like there was support there, at least in the House."
The spending bill passed the Senate's appropriations committee late Sunday night in a party-line vote. Numerous Democratic amendments failed, and Democrats generally expressed disappointment with the proposal.
"It just makes no sense to me in light of the fact that we could raise some serious revenue" via a natural gas severance tax, said Sen. Jim Ferlo, D-Highland Park.
The outlook appears bleak, at least in the short term, for a vote on two of the governor's other major legislative priorities: a proposal to overhaul pensions for new employees and changes to how liquor is sold in the commonwealth.
The Senate appropriations committee unanimously approved a plan to remove the state's elected officials from the state's pension system and place them into a 401(k)-style plan. However, the plan is not expected to pass the House and, at an estimated $18 million in annual savings, was considered more of a symbolic gesture than a solution to the state's $50 billion unfunded pension liability.
Mr. Corbett on Sunday afternoon made an eleventh-hour push to accompany the budget with changes to the retirement benefits for future state and school employees, saying that if Philadelphia Democrats helped pass a pension bill, Republican legislative majorities would authorize a cigarette tax within the city to generate funding for its beleaguered school district.
"The Philadelphia delegation, the Democrats, have an opportunity," Mr. Corbett told reporters in his Capitol office. "I'm giving them the option of being able to help their school district."
Soon afterward, Sen. Vince Hughes joined fellow Philadelphia Democrats to say the governor "should be ashamed" of himself for tying funding for the city's schools to a "dead" pension proposal.
Philadelphia Mayor Michael Nutter walked the Capitol hallways Sunday trying to get votes for the local cigarette tax.
In a letter to the city's delegation in Harrisburg, the Philadelphia schools superintendent and head of the city school reform commission wrote that without additional funding from Mr. Corbett's original budget proposal, the district would face a budget gap of more than $100 million.
Education protesters filled the Capitol for the past several days, advocating for more funds for schools.
One, Anita Drummond of Penn Hills, said she was here on behalf of her grandchildren's schools.
"My grandchildren are important to me, and the budget cuts are affecting them," she said.
Kate Giammarise: 717-787-4254 or email@example.com. Karen Langley: 717-787-2141 or firstname.lastname@example.org.
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