HARRISBURG -- Democrats and Republicans resumed the state budget conference committee meetings today, and initially they were about $600 million apart on spending proposals -- a major gap.
Democrats on the six-member panel opened the session by presenting their new 2009-10 budget proposal of $28.1 billion. This was significantly less than the $29.1 billion proposal offered by House Democrats two months ago.
House Minority Leader Sam Smith said he has prepared an alternative budget plan of almost $27.5 billion for the fiscal year that began two months ago.
Rep. Dwight Evans, D-Philadelphia, said there was a gap of as much as $1.7 billion between revenue and spending in the Democrats' plan, which would have to be filled mostly through increased, recurring revenues, but also with some spending cuts. He noted that the new Democratic plan already had made $1 billion in spending reductions to get down to the level of $28.1 billion.
With $24 billion in state tax revenues for 2009-10, bolstered by $2.4 billion in federal economic recovery funds, the state has $26.4 billion to spend. To go above that level would require the use of recurring and one-time revenues, such as the $750 million Rainy Day Fund and/or the $700 million surplus in a fund that helps doctors pay medical malpractice insurance premiums.
Legislators are considering increases in the sales tax rate; removal of some exemptions to the sales tax; increasing the $1.35 per pack cigarette tax by up to 25 cents a pack; imposing a first-time excise tax on cigar and smokeless tobacco sales; temporarily halting the phaseout of a tax on business assets; or adding table games to casinos.
Republicans said they want to look further at spending cuts, in order to lessen reliance on higher taxes. They especially said "wasteful'' spending in the Department of Public Welfare should be examined.
A quick breakthrough on an acceptable budget compromise does not appear likely at this time.
First Published: September 1, 2009, 4:00 p.m.