Gov. Wolf vetoes Republican spending plan: 'This budget is simply not balanced'
June 30, 2015 11:59 PM
Chris Knight/Associated Press
Pennsylvania Gov. Tom Wolf, speaks at state Capitol in Harrisburg on Tuesday.
James Robinson/Associated Press
Pennsylvania Gov. Tom Wolf speaks during a news conference at the state Capitol in Harrisburg.
By Karen Langley and Kate Giammarise / Post-Gazette Harrisburg Bureau
HARRISBURG — Let the standoff begin.
After a whirl of activity Tuesday, the Republican majorities of the Pennsylvania House and Senate sent the governor a GOP-crafted budget, along with legislation to disband the state system of wine and liquor sales and end defined-benefit pensions for most future state and public school workers. Shortly after 9 p.m., Gov. Tom Wolf undid their planning on the budget.
Mr. Wolf vetoed the full budget proposal, the first time in recent history that a governor has rejected a budget in its entirety.
“This budget is simply not balanced,” he said at a nighttime news conference. “I ran a business, and if I took a budget that looked anything like this to my bank, they would have thrown me out of the office.”
The governor said he would study the companion bills on liquor sales and pensions and respond to the GOP today.
The Republican budget would accomplish none of Mr. Wolf’s priorities: no enactment of a severance tax on natural gas to provide education funding; no increase in the personal income and sales tax rates to provide subsidies to property tax bills; and a closing of the shortfall by means he has rejected as irresponsible.
Social services agencies and other groups have begun planning for the possibility of a prolonged delay in state funding. The administration told state workers Monday that they would continue to work and be paid.
The delivery of long-standing Republican priorities to the new Democratic governor made concrete the results of a 2014 election in which voters strengthened the GOP majorities in both chambers while ousting the previous governor, Tom Corbett, in favor of Mr. Wolf, a Democrat with a doctorate in political science but no history in elected office. Votes on the budget and the liquor store and pension legislation went largely along party lines.
The governor has made clear that he prefers to improve the state liquor stores and to maintain employee retirement benefits while refinancing a portion of the state’s pension liabilities.
The $30.1 billion budget bill, which would not raise taxes but would rely upon revenue from the GOP liquor plan, cleared the Senate, 30-19, after passing the House on Saturday.
Senate Majority Leader Jake Corman, R-Centre, said Republicans had attempted to reach a budget deal with the governor but that the two sides had been unable to bridge their ideological differences. With no agreement in sight, the General Assembly had to pass a budget, he said.
“I think if the governor signs all these bills, his dwindling poll numbers will go up significantly,” Mr. Corman said before the governor announced his veto. “If he chooses to veto it, so be it, and I’ll be here. I’ll be here to work with the governor to try to come up with a plan.”
Senate Minority Leader Jay Costa, D-Forest Hills, said after the votes: “We believe that at the end of the day we will be coming back to Harrisburg to address these very important issues that will not, in my view, be supported by the governor as we move forward.”
As the hours ticked toward the start of the new fiscal year today, the House and Senate traded the liquor privatization and pension reform bills, both longstanding Republican goals that have eluded their advocates. The details of the compromises between the House and Senate Republicans were revealed only in recent days, prompting criticism from Democrats that the legislative process had been rushed.
“This bill is not ready for prime time,” said Rep. Dan Frankel, D-Squirrel Hill, about the pensions bill. “We’re making this decision without the necessary information that each and every one of us should have.”
The liquor bill would allow beer distributors and restaurants to sell wine and spirits to go, with the Liquor Control Board closing state liquor stores as private sellers open nearby. The state’s wholesale liquor operation would be first leased and then sold to licensed importers.
The bill cleared the Senate, 27-22, with a few Republicans joining Democrats in opposition, and then the House 113-82. Democrats protested the loss of jobs that would follow the closing of the state stores and argued the state would be better served by improving a moneymaking asset.
“We’ve heard the public say we want convenience with regard to liquor, we want better pricing, we want better variety,” said Sen. Jim Brewster, D-McKeesport. “If we can accomplish the same financial goal and provide what the consumers want and preserve 4,700 jobs, why would we not do that?”
Republicans have argued that Pennsylvania should not be in the business of selling alcohol.
The pensions plan would enroll future Pennsylvania state and public school workers — with the exception of state troopers and corrections officers — in 401(k)-style, defined-contribution and accompanying cash-balance retirement plans, rather than in traditional pensions. Legislators, when re-elected, would cease accruing benefits into their pensions and be enrolled in the defined-contribution and accompanying cash-balance plans.
Republicans said change is necessary because pension costs are increasingly eating up the budgets of the state and school districts.
“No one seems to care about the suffering of the taxpayer,” said Rep. Rick Saccone, R-Elizabeth.
Democrats, and a handful of Republicans, said the proposal would do little to save the state money in the short term and that the costs of transitioning to the new plans could even increase the unfunded liabilities of the systems. They said the legislation would drastically cut retirement benefits for future workers.
Mr. Costa said he hoped Mr. Wolf would veto the pension bill because, he said, its savings come from “robbing” the benefits of future workers.
“Senate Bill 1 does not reach common ground,” he said.
The pension debate grew so heated that House Speaker Mike Turzai reminded the House: “You cannot impugn or question the motives of any other members here.”
The bill cleared the House, 106-89, and the Senate, 29-20, with all Democrats and a few Republicans in opposition.
Karen Langley: firstname.lastname@example.org or 717-787-2141 or on Twitter @karen_langley. Kate Giammarise: email@example.com or 717-787-4254 or on Twitter @KateGiammarise
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