It’s budget business as usual in Harrisburg
Only in Pennsylvania. Yes, we have a budget in place, one calls for our friends in Harrisburg to spend $32 billion of your hard-earned tax dollars. It’s been in place since the state-mandated deadline of July 1.
What we don’t have is a way to pay for it.
Still, two and a half months later.
Actually that’s not technically correct.
We actually have two of them. That’s right. There are now two funding plans floating around the state Capitol.
At this point we might remind you that Republicans control both the House and Senate, so why is it that they have yet to agree on a way to fund the budget? One word: Taxes. The Senate version calls for some new levies, including something many people have been calling for now for years — a new severance tax on the state’s natural gas drillers.
But Republicans in the House, under the thumb of Speaker Rep. Mike Turzai, R-Allegheny, chafe at the idea of any new taxes.
Late Wednesday night they passed a funding package of their own and made like George H.W. Bush in the process.
Read their lips: No new taxes.
Instead, to close the state’s $2.2 billion revenue gap, they are calling for their Harrisburg pals to raid the piggy banks of several programs, including mass transit, environmental protection and economic development. The plan also would raid a portion of the state’s tobacco settlement fund and offer some expanded gaming.
But even that won’t get them to the finish line. Just for good measure they’re also planning to float a $1 billion loan.
The backers of this proposal insist skimming off these surplus funds will not harm state services. Those on the front lines – in particular transportation – are not nearly as sure. Officials at SEPTA already are warning of cuts if the plan is put in place.
House Republicans do not seem to be swayed.
“We can either tax our constituents, or we can use the money we already have,” said Rep. Paul Schemel, R-Franklin.
Conservative House Republicans take their cue from Turzai, who believes any tax hike is something akin to anathema. It has not escaped notice that Turzai also continues to toy with the notion of challenging Democratic Gov. Tom Wolf.
Speaking of the governor, he’s not exactly enamored with the House GOP plan, labeling it “irresponsible.” More importantly, Wolf notes that the state is careening into serious fiscal jeopardy unless a budget – and a funding plan – is put in place. The governor has indicated the state would need to start making cuts as early as Friday if a deal to resolve the threemonth budget impasse is not in place.
On Friday Wolf in fact announced the state will delay more than $1.7 billion in payments due largely to Medicaid insurers and school districts.
The House funding measure passed – barely – by a 103-91 margin, just one more vote than the necessary 102 needed to pass. It did not receive a single Democratic vote. The Dems were joined by a sprinkling of 15 moderate Republicans, mostly from here in southeastern Pennsylvania, including Rep. Alex Charlton, R-165 of Springfield. Casting votes in favor were Republican Reps. Nick Miccarelli, R-162 of Ridley Park, Rep. Jamie Santora, R-163 of Upper Darby, and Rep. Steve Barrar, R-160 of Upper Chichester.
The bill now moves to the Senate, which passed its plan including $500 million in new taxes, last July.
Among those who pushed the new severance tax on natural gas was Sen. Tom McGarrigle, R-26 of Springfield. McGarrigle has not been shy about wanting the new tax, making it part of his original campaign for office, even at a time when then-Gov. Tom Corbett, an adamant foe of any new taxes, was sitting atop the GOP ticket.
“It’s critical,” McGarrigle spokesman Mike Rader said of the severance tax. “It’s not the entire solution for the budget issue, but it is a part of it.”
Critical also would describe the state’s fiscal straits. Treasurer Joe Torsella and Auditor General Eugene DePasquale this week penned a letter warning that $860 million in expenditures could be in jeopardy as early as Friday.
“Please be advised that without additional revenue, the balance in the General Fund is projected to fall below zero this Friday,” the letter stated.
Democrat Rep. Leanne Krueger-Braneky, D-161 of Swarthmore, mocked the funding mechanism passed by her GOP colleagues. She indicated that Republicans went so far as to add an amendment that would take the state’s existing impact fee on natural gas and change the name to a severance tax.
Both Wolf and Democrats are warning that a downgrade to the state’s already shake credit rating looms in the near future. Standard & Poor’s already has the state on a negative credit watch.
If passed, at best the House GOP plan would serve as a Band-Aid, closing this year’s gaping budget wound, but failing to resolve the state’s ongoing budget dilemma.
As usual, many in Harrisburg see the Republican House plan as merely a starting point.
In the meantime, the clock is ticking.
In other words, it’s business as usual in the state Capitol.