Revenue puzzle in pieces day before spending bill deadline
HARRISBURG » Negotiators in Pennsylvania’s nine-dayold budget stalemate signaled that they were having difficulty reaching agreement Sunday on a deal to scrounge more than $2 billion to patch up the state government’s tattered finances.
Closed-door talks in Pennsylvania’s Capitol came a day before Democratic Gov. Tom Wolf’s midnight Monday deadline to make a decision on the main appropriations bill in a $32 billion budget package.
Negotiators have said little about their private discussions, although House Majority Leader Dave Reed, R-Indiana, suggested that Wolf should start thinking about which parts of the spending bill to veto.
“The administration has consistently said they need more revenue than some of the options that we provided and we, basically, at least from a House perspective, reached the extent of what we’re willing to offer,” Reed told reporters Sunday afternoon.
Senate Minority Leader Jay Costa, D-Allegheny, disputed the contention that Wolf simply pushing the Republican-controlled Legislature to produce more money in a revenue package. Wolf wants more money that can be counted on every year, rather than one-time cash infusions that will not avoid another downgrade to Pennsylvania’s battered credit rating, Costa said.
“The governor wants recurring revenue,” Costa said. “A sufficient amount of recurring revenue to meet the bond-rating issue has not been presented yet.”
Pennsylvania has struggled with an entrenched post-recession deficit, and credit downgrades in 2012 through 2014 have left it with among the nation’s lowest credit ratings. The $1 billion-plus shortfall in the just-finished fiscal year was state government’s biggest since the recession.
Both the House and Senate were expected to hold voting sessions Sunday evening, largely as a sidelight to the private budget discussions.
Those discussions have revolved around another big expansion of gambling in the nation’s No. 2 commercial casino state and borrowing $1.5 billion against future revenues from Pennsylvania’s share of a landmark 1998 multistate settlement with tobacco companies. In his February budget proposal, Wolf proposed a $1 billion tax package he framed as closing corporate loopholes and making corporations pay their “fair share.” It included slapping a production tax on drilling in the Marcellus Shale, the natural gas reservoir that made Pennsylvania the nation’s No. 2 natural gas state.
Anti-tax leaders of the House and Senate Republican majorities, however, have not publicly supported a tax increase or tested support for one in their caucus.
Signing the entire appropriations bill — it packs about $31.4 billion for the current fiscal year and $400 million that will go on the books of the last fiscal year — or letting it become law on its own would be unconstitutional without the funding to underwrite it, Reed said.
“I don’t think the responsible thing to do would be just to let that budget become law,” Reed said.
Legislation carrying approximately $600 million in aid to Penn State, Pitt, Temple, Lincoln and Penn is awaiting the passage of a revenue package.
The fiscal year began July 1. Without a signed budget plan in place, the state has lost some of its spending authority, although the Wolf administration has said it anticipated no program or service interruptions, at least through Monday night.
For the second straight year, the Legislature sent an on-time, bipartisan spending bill to Wolf, but with no plan to pay for parts of it.
Last year, Wolf let the plan become law without his signature when the 10day signing period expired — despite questions about whether the move was constitutional — and lawmakers delivered a $1.3 billion funding package three days later.