House Republicans approve revenue plan to finance long-overdue $32B state budget

HARRISBURG — Pennsylvania House Republicans have a budget plan. This time, they hope it sticks. The GOP-controlled House worked late into the night Tuesday to narrowly approve a revenue package, 102-88, to help pay for the $32 billion budget that passed more than three months ago.

House Majority leader Dave Reed, R-Indiana, told reporters that the new plan would increase to $1.5 billion the amount the state would borrow to help close a nearly $2.2 billion deficit. The loan would be repaid using proceeds from the state’s landmark settlement with tobacco companies.

Neither Gov. Tom Wolf, a Democrat, nor the Republican-controlled Senate would commit to it Tuesday night.

“Look, it’s a plan,” Mr. Reed told reporters as he emerged from a key committee hearing on Tuesday afternoon. “We’ve got to keep trying.”

If that sounds familiar, it’s because it is. House Republicans, stead fast in their aversion to tax increases, have been the holdouts in the state’s 3½-month-long-budget stalemate.

They have rejected several revenue-generating proposals, including a new tax on natural gas drilling and a new hotel tax.

Borrowing money, and using proceeds from the state’s tobacco fund to pay for it, has been a

constant in budget negotiations. In July, the GOP-controlled Senate approved a revenue plan that, among other items, included $1.3 billion in borrowing.

Mr. Wolf has said he is open to borrowing between $1 billion and $1.5 billion, as long as the Legislature also comes up with ways to raise money to prevent future deficits.

Much of the new House plan, however, calls for onetime fixes.

House Republican staffers said Tuesday that aside from the increase in borrowing, the GOP plan going forward would include roughly $300 million in transfers from special state funds; another $200 million from expanded gambling, the details of which have yet to be worked out; $200 million from a fund that provides insurance for doctors who have difficulty finding medical-malpractice insurance; and $30 million to $43 million from requiring online retailers to collect the state’s 6 percent sales tax on goods they sell.

“We look forward to reviewingit when they send it to us,” Senate GOP spokeswomanJennifer Kocher said.

Wolf spokesman J.J. Abbott said the governor was “aware” of the plan and that he believes the best way to deal with the state's chronic deficit problems is to enact a new tax on natural gas drilling in the Marcellus Shale.