Unbalanced budget now law
For the second straight year, Democratic Gov. Tom Wolf let a state budget bill become law despite the fact that it is badly out of balance as he presses Pennsylvania’s Republican-controlled Legislature to approve a tax package big enough to avoid a credit downgrade.
Wolf’s office released his decision in a statement Monday, hours before the nearly $32 billion spending bill was to become law without his signature at midnight.
In a statement, he said he hoped lawmakers could come together in the coming days to produce a responsible solution to balance the budget.
“Our creditors and the people of Pennsylvania understand a responsible resolution must take real and necessary steps to improve Pennsylvania’s fiscal future,” Wolf said.
In the 10 days after lawmakers sent it to his desk, Wolf had the power sign it into law, veto it or strike out some of the spending.
Still, there were questions about the constitutionality of a budget bill becoming law without a plan in place to pay for it.
Monday was the 10th day of a
budget stalemate between Wolf and the House and Senate Republican majorities.
There was no sign of an agreement on an approximately $2.2 billion revenue package that lawmakers say is necessary to resolve the state’s largest shortfall since the recession and a projected deficit in the fiscal year that began July 1.
The package will rely primarily on borrowing and involves another big expansion of casino gambling in the nation’s No. 2 commercial casino state.
Looming is the potential for another downgrade to a credit rating already damaged by Pennsylvania’s failure to deal with a post-recession deficit.
Wolf has rejected Republican plans that lean more heavily on one-time cash infusions, and pressed Republicans to support a larger package of tax increases, top lawmakers say. Efforts were still being made to resolve it, Senate Majority Leader Jake Corman, RCentre, said Monday afternoon.
“Every hour there’s a new plan and hopefully one will come that we can get everyone on board with,” Corman told reporters.
With both the House and Senate in session Monday, Republicans were pressing ahead with other business. It was unclear, however, whether Republicans could even pass a budget-balancing revenue plan without help from Democratic lawmakers, who have backed Wolf.
Friction revolved around
Wolf’s insistence that lawmakers produce $700 million to $800 million in reliable revenue, such as tax increases, to help the state avoid another downgrade. Republicans, however, have been unwilling to offer a tax package half that size, Democrats say.
Top senators said tax increases under discussion involved basic cable service, movie tickets, bank profits, telephone service and electric service.
Another element of a proposed budget deal, designed to save money, would give the state the option to shut down unprofitable wine and liquor stores and transfer the stock to a nearby beer distributor to be sold there.
Wolf has pushed Republicans to agree to a production tax on natural gas drilling in the Marcellus Shale,
his third straight year of doing so. Pennsylvania, the nation’s No. 2 natural gas state, is the only large natural-gas-producing state that does not tax the product. However, top Republican lawmakers have rejected that.
Without a signed budget plan in place, the state has lost some of its spending authority, though the Wolf administration has said it anticipated no program or service interruptions, at least through Monday night.
Last year, the Legislature sent an on-time, bipartisan spending bill to Wolf, but with no plan to pay for parts of it.
Wolf let the plan become law without his signature when the 10-day signing period expired and lawmakers delivered a $1.3 billion funding package three days later.