House approves state budget, accompanying tax bill
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HARRISBURG -- It looks like 100 may be the General Assembly's lucky number, as legislators near the end of arduous work on a long-overdue state budget.
In a 107-93 vote tonight, the state House approved a state spending plan along with a tax code bill, which includes $1.7 billion in new revenue to fund it.
The Senate, which previously approved the tax bill, could vote on the spending plan as soon as tomorrow. Senate leaders have been briefed on the House's amendments and say they agree on principle but need to review the details.
The revenue bill raises the cigarette tax by 25 cents per pack, delays the phaseout of a tax on business assets, authorizes leasing of more state forest land for natural gas drilling, depletes the state's "rainy day" emergency fund and starts a tax amnesty program aimed at getting scofflaws to pay up.
The new taxes, which accompany $2 billion in federal stimulus aid and $25 billion from the sales tax, income tax, corporate taxes and other state revenues, will pay for a fiscal year 2009-10 budget of nearly $27.8 billion. The fiscal year started July 1 -- 99 days ago.
The revenue bill also includes a provision to collect taxes and fees from casinos that choose to add table games such as poker and roulette to their slots offerings. However, collection of that revenue is contingent on passage of a separate gaming bill, Senate Bill 711. The terms of that bill, including the amount of the taxes on table games and the size of license fees, are still being negotiated.
The Legislature has been under sharp criticism by counties and human service agencies for taking so long to enact a new budget, as many agencies and programs that needed state revenue haven't been getting it.
There have been some differences between the House-approved spending plan and Senate Bill 1085, which the Senate approved on Monday. But House Majority Leader Todd Eachus, D-Luzerne, was optimistic those differences can be ironed out quickly.
"If the House amends [the House plan] in a way that is consistent with how Speaker Keith McCall described it to me (yesterday), it should receive a favorable reception in the Senate," said Senate Majority Leader Dominic Pileggi, R-Delaware.
"While I would very much like to say we have a [budget] agreement, given the 100-day history of this budget saga, the Senate will review the document in detail ... ," Mr. Pileggi said. "I expect our review to take most of the day (today) if not the entire day."
Mr. McCall, D-Carbon, said: "We are hopeful and confident that, after the many weeks of negotiations, the state Senate will join us in this compromise and pass this bill as soon as possible."
Action is also still needed on a third element in the budget picture, Senate Bill 711, which would allow casinos to add table games such as poker, blackjack and roulette. That bill is important because about $200 million in the tax package comes from the table games.
Mr. Eachus said the table games bill might come up for a vote as early as tomorrow. The money from table games "is important to finish the balance sheet,'' he said tonight. "The tax package is completed.''
As for the long delay in completing a full budget, "I am disappointed we went so long, but we have come to a responsible spending plan," Mr. Eachus said. He noted that economic conditions this year are the worst since the 1930s, and the state ended the 2008-09 fiscal year on June 30 with a deficit over $3 billion.
"This is truly a morally and fiscally responsible budget that doesn't favor big business over average working families, doesn't raise broad-based taxes, and doesn't sacrifice House Democrats' commitment to protecting our children, our seniors, our veterans and our most vulnerable citizens," said Mr. Eachus.
He was pleased that the tax package adopted tonight doesn't include many unpopular taxes, such as increases in the personal income tax or sales tax, a tax on arts and cultural group tickets, a tax on small games of chance run by fraternal groups or a tax on cigars and smokeless tobacco.
He said many Democrats still favor enacting a severance tax on natural gas pumped from areas of Marcellus shale in the state, but that tax isn't included in the just-approved tax package. Another effort may be made in 2010 to enact it.
As for table games, two major issues are still unresolved -- the tax rate and the one-time, upfront licensing fee that casinos must pay. Tax rates of 12 percent, 18 percent and 34 percent have been discussed, along with license fees of $10 million, $15 million and $20 million. Casino officials want the tax rate and fee put as low as possible.
Earlier tonight, passage of the tax bill came on a 102-96 vote -- and every one of those 'yes' votes was needed. Passage of a bill requires affirmative votes from at least 102 legislators, a bare majority of the House's 203 members.
Rep. Dennis O'Brien, R-Philadelphia, a former House speaker, provided the only crossover vote from his side of the aisle. Meanwhile, two Democrats -- Rep. John Pallone of New Kensington and Rep. Joe Petrarca of Vandergrift -- voted with the GOP.
House Republicans voted 'no' on the tax bill because they preferred to see spending cuts rather than tax hikes and transfers from special accounts, said GOP caucus spokesman Steve Miskin.
However, Republicans did provide votes needed for suspension of House rules so the budget could be voted on tonight, even though they thought the $27.8 billion budget is too high.
"We don't want to delay the process. We're at 99 days," said Rep. Mario Civera, R-Delaware, the ranking Republican on the Appropriations Committee.
First Published October 7, 2009 6:48 pm