Pa. House passes state budget on to Senate

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HARRISBURG -- The state House passed a $29.1 billion state budget on to the Senate Wednesday evening, though the proposal is expected to be altered significantly before being finalized as the state‘‍s spending plan for the next fiscal year.

It includes an additional $70 million for basic education funding, which has been a topic of bitter dispute for much of the administration of Gov. Tom Corbett.

The budget counts on $380 million in revenue from privatizing state liquor stores -- a proposal that is unlikely to find support in the state Senate. The House approved a privatization plan last year but the bill has been unable to pass the Senate. Recent proposals floated in the Senate were aimed at increasing consumer access to beer and wine while keeping the state store system in place and would not generate revenue for the commonwealth.

It also includes several elements proposed by the governor in February, such as shortening the length of time unclaimed property is held before being claimed by the state -- from five years to three years -- a change expected to raise $150 million in revenue, and counting on $75 million from lifting a Rendell-era ban on new oil and gas leases on state forest lands.

Notably, the House budget does not include a severance tax on natural gas drilling, which Democrats -- the minority party in both the House and Senate -- have pushed for and many Capitol observers expect to be part of a final budget plan to help close a $1.4 billion budget gap. Additional taxes on cigarettes or other forms of tobacco could also be part of a final budget agreement, but were not included in the plan passed by the House Wednesday.

The budget also makes the full pension payments required under Act 120 of $505 million to the State Employees‘‍ Retirement System and $1.46 billion to the Public School Employees’‍ Retirement System.

The proposal also assumes $48 million in savings from a two-year hiatus on new tax credits for a 13 separate tax credit programs, such as the Research and Development Tax Credit, Neighborhood Assistance Program and Historic Preservation Tax Credit, which has raised objections from a host of business and non-profit groups.

A number of those tax credits are critical to development and preservation work in Pittsburgh and surrounding areas, said Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation.

“They undergird a number of our neighborhood restoration and revitalization programs,” Mr. Zieglar said, and are used efficiently to leverage additional funding for development projects.

“The impact of the suspension of the [Neighborhood Assistance Program] tax credit really has a serious detriment to our budget and our food supply,” said Lisa Scales, CEO of the Greater Pittsburgh Community Food Bank. The tax credit is used by companies that donate food or funds to the food bank. “These tax credits are really a vital incentive” to donors, she said.

“I understand the state needing to make up for the budget deficit,” she said. “But it shouldn't be at the expense of the most vulnerable citizens.”

The bill which passed by a vote of 110-93, is expected to be taken up by the Senate Appropriations Committee Thursday.


Kate Giammarise: kgiammarise@post-gazette.com, 717-787-4254 or on Twitter @KateGiammarise. First Published June 25, 2014 12:00 AM

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