Analysis: Political interests hold sway in budget battle

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HARRISBURG -- The prolonged battle over the 2009-10 state budget has as much to do with the gubernatorial and General Assembly elections of 2010 as it does with the financial crunch of 2009, say many politicians and Capitol observers.

Republicans would love to regain control of the state House next year. They ran it for 12 years starting in 1995, but then narrowly lost control to the Democrats in November 2006.

But there's a bigger prize at stake in 2010. Republicans want to retake the governor's office, which since January 2003 has been occupied by Democrat Ed Rendell.

"Certainly we want the opportunity to run the governor's office and the state House again," House Republican Whip Mike Turzai of Bradford Woods said last week. And a key step toward that goal, he added, is trying to block what he sees as Mr. Rendell's "big-borrowing and big-spending'' budget plans.

"Republicans have not held together tough in the past against Ed Rendell," Mr. Turzai said, "but we're unified this time. We have to stand up to this guy and make it clear we won't continue his chaotic ways of record borrowing and spending."

Matthew Brouillette, head of a conservative group called the Commonwealth Foundation, said, "For good or bad, elections have always had a bearing on the lawmaking and budgeting process."

In the budget stalemate -- which is nearly two months old and shows no signs of easing -- Republican officials "have determined that a 'no tax' position is in their best political interest," Mr. Brouillette said, "while only Gov. Rendell and state Rep. Dwight Evans remain adamant about increasing broad-based taxes."

Mr. Evans is a Philadelphia Democrat who chairs the House Appropriations Committee.

Republican leaders have been trying to paint Democrats as advocates of higher spending and higher taxes, hoping it will bolster the GOP's chances in next year's elections. And the Democrats realize what is going on.

It's one reason why Rep. Nick Kotik, D-Robinson, and other members of the so-called "Blue Dog" conservative Democrats in the House, took a strong stand against Mr. Rendell's recent call for a 16 percent increase in the personal income tax rate.

He and other Blue Dogs, including Reps. Harry Readshaw of Carrick, Joe Markosek of Monroeville and Tony DeLuca of Penn Hills, knew they would be politically vulnerable next year if they supported a higher income tax. They urged House Democratic leaders to shelve the idea, which they did, even though the governor was pushing it.

Senate Democrats also are concerned about Republican tactics. The Democratic leader, Sen. Bob Mellow of Lackawanna, took to the Senate floor last week to denounce an unsuccessful Republican attempt to override Mr. Rendell's vetoes of some proposed expenditures for 2009-10.

"Republicans know this override won't happen," he said. "They're just playing games here. This is more of a political move than a fiscal move. This activity is about November 2010, not about the late summer of 2009."

Mellow spokeswoman Lisa Scullin added, "Republicans aren't being cooperative on a new state budget because they want to use the impasse [for political gain]. They'll say, 'We had a Democratic governor and look what happened,' " meaning budget gridlock.

Republicans frequently mention that in Mr. Rendell's seven years as governor, a final, complete state budget has never been enacted by the July 1 start of each new fiscal year.

The Senate has been in GOP hands for years, currently by the almost unbreakable margin of 29-20, with one vacancy.

Democrats have run the House since the November 2006 elections, when they eked out a margin of 102-101. In November 2008 they boosted their margin slightly, to the current 104-99. But Republicans would need a net gain of only three seats next year to recapture the House.

Rep. Tom Caltagirone, D-Berks, likes being chairman of the House Judiciary Committee and doesn't want to go back to pre-2007, when Republicans ran all the committees.

"This budget debate has an awful lot to do with next year's elections and who will catch the blame" if taxes are raised to balance the 2009-10 budget, he said. Republicans "would love to see us [Democrats] put up a tax vote. They're trying to paint us as favoring higher taxes."

Even though the income tax increase is off the table, Mr. Rendell insists the state still needs an increase in a reliable "recurring" revenue to erase a $3.2 billion deficit left over from fiscal 2008-09 and to balance budgets for this year and next.

Some legislators are looking at the sales tax -- specifically, removing some of the current exemptions to the tax, which is 6 percent in 65 counties but 7 percent in Allegheny County and Philadelphia. Applying the sales tax to advertising sales and legal services is being looked at to raise hundreds of millions of dollars.

Mr. Rendell is irked that Senate Republicans steadfastly refuse to consider any tax increase. He also has proposed a 10-cent-a-pack increase in the $1.35 per pack cigarette tax, and he has suggested taxing cigars, smokeless tobacco and the extraction of natural gas from areas of Marcellus shale.

Mr. Caltagirone had a wistful, and probably unrealistic, thought.

"I wish we could put politics aside," he said. "Honest-to-goodness budget negotiations have to take place. Reason has to prevail."


Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.


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