Lawmakers may have to work overtime on budget-funding plan

Governor has warned of steep cuts by week’s end

HARRISBURG — The pressure is on.

Gov. Tom Wolf has said that by the end of this week, he will have to make steep cuts to the $32 billion budget the Republican-controlled Legislature passed in June unless the House of Representatives moves on a proposal to fund it.

Although the House returned to session this week after a six-week summer hiatus, Republicans who hold the majority in that chamber remain divided over a revenue plan. On Tuesday, leaders adjourned without a vote on one approach to close the $2.2 billion deficit — by transferring money from special-purpose funds.

In the meantime, a credit rating agency has warned of a looming downgrade. And state Treasurer Joe Torsella, along with Auditor General Eugene DePasquale, on Tuesday said they would be “disinclined” to either extend a shortterm loan or sign off on short-term borrowing in the bond markets to help the state pay its bills.

“My obligation as treasurer is to make only prudent investments of the funds under our care, not to enable continued budgetary dysfunction and a chronically unbalanced budget,” Mr. Torsella said.

After the House adjourned Tuesday without a vote, House Majority Leader Dave Reed, R-Indiana, said the chamber intends to push out a proposal this week, even if it means lawmakers must work through the weekend. Representatives are scheduled to reconvene Wednesday.

House Republicans are discussing ways to amend a plan presented last week by a group of rank-and-file members, many of them fiscal conservatives. Their plan would balance the budget by raiding special funds earmarked for a range of services, from toxic-site cleanupsto mass transit.

The proposal has come under scrutiny from Democrats, including Mr. Wolf, who has called it “nonsense.” And even some Republicans have balked at some of the proposed fund transfers. It did not appear Tuesday to have enough support to pass the House, and Republicans were working on changing portions of the plan.

Exactly how much of that plan would remain in whatever budget package emerges from the House this week remains unclear. Mr. Reed provided few specifics Tuesday as to which items encountered the most opposition.

But, he said, “I think the general premise of not using taxing and borrowing as our first and last opportunity to balance this budget is a theme that our caucus is pretty united on.”

The Senate in July passed a revenue package that would balance the budget the Legislature passed June 30 through a mix of borrowing and new and increased taxes. Mr. Wolf has said he supports the Senate’s proposal, but tax-averse House Republicans have rejected it.

Republican Senate leaders, in turn, have expressed concern over the direction their House colleagues are headed. On Tuesday, Senate GOP spokeswoman Jennifer Kocher added: “We remain committed to reviewing whatever final product the House sends us but want to emphasize we need to see that sooner rather than later.”

Mr. Wolf has not said exactly what he will cut come Friday, when the state’s main bank account will plunge into a negative balance. The governor has warned that funding for roads, schools and other essential services may be in jeopardy.

On Tuesday, Wolf spokesmanJ.J. Abbott said the governor was still “evaluating all options.”

But, he said, “the easiest and most responsible option continues to be urgent House action to fund the budget that they passed overwhelmingly in June.”

In recent weeks, other House members have proposed alternatives to the plan pushed by conservatives in the chamber. Last week, Rep. Gene DiGirolamo, R-Bucks, pushed a revenue plan that would include a new tax on natural gas drilling as well as a small increase in the state’s 3.07 percent personal income tax.

House Democrats on Tuesday also advocated for a similar plan, but it is unlikely Republican leaders will act on it.