Pa Budget

Nov 3, 2017
Pennlive.com
Gov. Tom Wolf allows school bill to become law that alters decades-old teacher furlough law

Gov. Tom Wolf is allowing a multi-faceted education bill to become law that contains a controversial teacher furlough reform, a ban on “lunch shaming,” and provides $10 million more for tax credits for companies that donate to private school scholarship funds.

Wolf announced his decision on Friday afternoon that he will neither sign nor veto this bill and instead will let the 10-day clock run out on Monday, which automatically allows it to become law.

“Governor Wolf believes components of this bill are important: delaying the Keystone Exams, expanding opioid education in schools, curbing ‘lunch shaming’, and providing additional funding to help distressed school districts,” said his spokesman J.J. Abbott.

“Though there are components of the bill that he has concerns about, particularly Republican plans around teacher evaluation and termination, he will allow it to become law but withhold his signature. Despite those who prioritize putting pressure on public schools and making the jobs of teachers harder, Governor Wolf will continue to protect and invest in education.”

The so-called school code bill is the final piece of the 2017-18 budget package that the General Assembly sent to Wolf for enactment last week. He signed most of the other bills related to the budget but did veto the human services code mostly over a requirement it included that would force some Medicaid recipients to look for work while they’re receiving assistance.

His decision to allow the education bill to become law was cheered by Rep. Stephen Bloom, R-Cumberland County. Bloom had sponsored the legislation that was folded into the code bill that allows school districts to furlough teachers for economic reasons and requires those determinations as to who gets furloughed based mostly on performance ratings.

Seniority would only come into play if two teachers had the same performance rating. Reinstatement of furloughed teachers would be done in reverse order in which they were suspended.

Wolf had vetoed a similar bill last year when it was sent to him as a standalone piece of legislation. Bloom said he was pleased the governor chose not to veto the entire school code bill over his objections to that particular part of it.

“For the sake of Pennsylvania students, I’m very pleased,” Bloom said. “It’s a very positive step for making sure the best teachers remain in the classroom for our kids where they belong.”

Bloom commented that there are enough goodies in this bill that folks on all sides of the school reform debate can find something positive to say about it. And he’s right.

Even Susan Spicka, executive director of Education Voters of PA, who disliked its inclusion of $10 million more for the private school scholarship portion of the popular Educational Improvement Tax found other parts to be appealing.

While she thinks it’s atrocious the Legislature would give money to benefit private schools when so many public schools are barely able to provide students with the educational opportunity they need to be successful, Spicka likes that it pushes back the use of the Keystone Exams as a graduation requirement for another year until 2019-20.

She also was pleased with the measure’s inclusion of a provision that requires school districts to provide meals to students regardless of the ability to pay and prohibits them from publicly identifying, stigmatizing, or assigning work chores to students who cannot pay or owe money for school meals. Spicka said she was unconvinced the Legislature would have passed that if it was a standalone bill.

Further, she said,”Language in the school code ensures that $63.5 million in reimbursements for students with high cost disabilities will be made to school districts. Without the school code, school districts could have been left high and dry and may have had to make up for this lost funding either through cuts or higher property taxes.”

So overall, she said despite her misgivings about it, “not allowing it to become law would have been worse.”  Source

Nov 2, 2017
phillytrib.com
Local legislators react to Wolf signing state spending plan

The Philadelphia delegation in Harrisburg breathed a collective sigh of relief after Gov. Tom Wolf signed the long-stalled spending plan to balance the state’s $32 billion budget.

Although he signed the package, which contains massive borrowing, and a large gambling expansion component to cover Pennsylvania’s $2.3 billion budget deficit, Wolf still expressed his displeasure with lawmakers who dragged out the process for nearly four months.

“I’m sick and tired of special-interest politicians, self-interest, political games trumping the public interest here in Harrisburg,” Wolf said.

State Rep. Maria Donatucci (D-185), the chairwoman of the Philadelphia County delegation, said the budget process had been grueling, but members are relieved to be able to get back to work on other matters still pressing in the legislature.

“This has been a long, hard-fought process over the last few months. My colleagues and I from the Philadelphia delegation have worked tirelessly to make sure that the budget the governor signed is best for all Philadelphians,” Donatucci said.

“This includes providing the much-needed fix to the Actual Value Initiative for the School District of Philadelphia, ensuring funding for our state-related universities, and providing a real solution for the issue of problem stop and go establishments all while protecting our hard-working neighbors by preventing the hotel tax and the storage facility tax,” she said.

State Rep. Donna Bullock (D-195) said while the budget is finally complete, attention must now be focused on the passage of a severance tax.

“Wealthy corporations must no longer be allowed to take Pennsylvania’s fleeting natural resources without paying their fair share,” Bullock said.

“I support the governor’s commitment to see this through and the reality is that this isn’t a Democratic issue,” she said.

“A severance tax can do more than balance the budget in future years, it can address the structural budget deficit or help create a rainy-day fund. This tax is supported by both parties and must be implemented by the time our next budget is due,” Bullock added.

Funding for the budget will include $1.5 billion from the state’s tobacco fund, money that stems from a 20-year-old settlement with states from tobacco companies that help to cover medical costs complicit with smoking and the use of tobacco.

It also includes adding online gambling, slot machines at truck stops and airports, and it paves the way for casinos to build satellite locations; all of which will bring in an estimated $200 million in licensing and tax revenue.

Part of the spending bill also legalizes and taxes consumer fireworks like Roman candles and small firecrackers.

It places a 12-percent tax on the purchase price of fireworks and still allows for taxing at the local level. Lawmakers have earmarked 75 percent of those tax dollars for emergency medical services grants and 25 percent for programs to train volunteer firefighters.

The budget package also includes some tax code changes that lawmakers said will generate another $100 million during the fiscal year.

“I supported our state budget package because we have an obligation to get a fair and equitable budget done in a timely fashion. It was important that we avoid the budget impasse that occurred two years ago,” said State Rep. Stephen Kinsey (D-201).

“Senior centers, countless human services, and even our school district were impacted. It put residents through serious hardship and I could not let that happen,” Kinsey said.

Kinsey joined others in the Philadelphia delegation who said lawmakers must now work towards building smart policies.

“We must work toward smart policies like a fair extraction tax, ensuring a fair, livable wage, and growing our economy with more jobs that create greater revenues for our state,” he said.     Read more

Nov 1, 2017
phillymag.com
You Could Soon Gamble at Philadelphia International Airport
And online and at truck stops, per a budget bill signed by Gov. Tom Wolf this week.

You’ve probably heard by now that Gov. Tom Wolf signed several pieces of legislation on Monday aimed at funding the state’s $32 billion spending plan.

The bills follow months of legislative chaos and debate over how to solve the state’s infamous budget stalemate.

The answer lawmakers and Wolf agreed on? Gambling.

According to the American Gaming Association, Pennsylvania’s commercial casinos generate more tax revenue than those in any other state. In 2015, commercial casinos contributed more than $1.37 billion in taxes.

Wolf has approved a bill that will expand gambling beyond Pennsylvania’s casinos to airports, truck stops and the internet.

With the legislation, Pennsylvania becomes the fourth state to allow online gambling – New Jersey, Nevada and Delaware are the others – and the first state to allow both existing casinos and the state lottery to move online.

The bill will also allow casinos to establish “gaming areas” — which include mostly videogame-style gambling — at eight airports, including the Philadelphia International Airport.

In addition, ten of the state’s casinos will be able to bid on a satellite casino license, which would allow them to open a facility housing up 750 slot machines and 30 table games. And some truck stops will be able to run a maximum of five “video gaming terminals,” which will resemble slot machines.

State legislators aim to generate about $200 million annually from the bill, according to CBS.

Source

Oct 31, 2017
City & State
Pork-barrel provisions in gaming bill pit DelCo pols against one other

After more than three months of gridlock, Gov. Tom Wolf quickly signed off on a massive gaming package that will legalize 10 new “mini-casinos,” truck-stop video slots, online poker and more. The move effectively ends the long stalemate over how to pay for PA’s $32 billion budget.

But some legislators, like state Rep. Madeleine Dean, openly complained that they had barely had time to grasp the nearly 1,000-page bill before it passed both the state House and Senate about one day after its introduction.

That may have been intentional, some say – the product of last-minute dealing to get the package through the General Assembly. Despite the state’s shaky financial outlook, this latest iteration of the bill is larded with convoluted payout schemes to fund ambiguous economic development projects in localities impacted by gaming.

“There was a complete lack of transparency in the process,” said Democratic state Rep. Leanne Krueger-Braneky. “Nearly all the changes were all put in by Senate Republicans. They had very little if no debate when it went through the Senate. When you have to vote on something less than 24 hours later, of course you can’t analyze everything.”

A share of the forthcoming $90-$100 million in new annual revenue will primarily be funneled into a wing of the Department of Community and Economic Development, called the Commonwealth Financing Authority, as a “host fee.” While the CFA is jointly guided by a board with representatives from the governor’s office, the House and the Senate, the department has notably been criticized for its own lack of transparency.

Krueger-Braneky said she was shocked to discover that Delaware County – where her district lies – would see its cut shoehorned into a new and somewhat unique county-controlled gaming authority.

Krueger-Braneky predicted this new gaming authority would fall under the sway of a Republican political machine that has long dominated Delaware County. She compared the setup to the troubled Erie County Gaming Revenue Authority, which had faced dissolution after allegations of financial mismanagement became public.

“What they’re setting up in Delaware County has already failed in Erie,” she said. “We’ve already got way too much patronage in Delaware County and I was shocked to see them making another money grab two weeks before an election. Maybe this is a golden parachute for someone who could lose their job.”

But Mike Rader, chief of staff to DelCo Sen.Tom McGarrigle, said that Krueger-Braneky was simply jealous of the good deal his boss and other local Republicans like Sen. Tom Killion had helped hammer out. Carving his home county out of the CFA arrangement would ensure more local control of gaming funds, he said. Read more

Oct 30, 2017
Post-Gazette.com
Wolf signs some budget bills, slams GOP majority

HARRISBURG – Gov. Tom Wolf on Monday signed most of the bills needed to bring the state’s $32 billion budget into balance, authorizing an expansion of casino gambling and a borrowing plan pushed by lawmakers.

And he took one more opportunity to complain about the politics of the Republican legislative majority that he blames for months of budget chaos and a credit downgrade.

“I’m sick and tired of special interest politicians, self-interest, political games trumping the public interest here in Harrisburg,” the Democratic governor said in a speech at the monthly press club luncheon in Harrisburg.

It sounded like an early campaign speech. Mr. Wolf is up for re-election next year, and one of the candidates who hopes to challenge him, Sen. Scott Wagner, R-York, was in the crowd.

Still, even after the governor’s speech and an impromptu press conference, many questions remain unanswered.

Near the top of the list is, how much will the state be looking to borrow? Mr. Wolf earlier this month unveiled a plan to borrow $1.25 billion and repay it using revenue from the state’s liquor control board. He did that when the Legislature was dragging its heels on a revenue package, before it passed a plan to borrow $1.5 billion against proceeds of the state’s landmark settlement with tobacco companies.

Mr. Wolf on Monday signed the tobacco-fund loan plan. Asked whether he will continue to pursue his idea of borrowing against liquor money, he first said “yes,” then later said he misspoke. At the end of the day, it was clear only that he will provide more clarity after the Commonwealth Financing Authority decides whether to approve the plan involving the tobacco money.

One of the bills Mr. Wolf signed Monday also required him to take $300 million out of dedicated funds for projects ranging from transportation to environmental clean-up. He did not specify which funds he might tap. “If I do that,” he said, he would “take a look at that to make sure it’s not actually damaging programs.”

Mr. Wolf suggested he may veto one bill remaining on his desk — the education code, which authorizes spending to the state’s public schools.

“There are a couple of things I’m not real comfortable with,” he said, though he didn’t note exactly which provisions troubled him.

He added later: “I’d like to, I think, go back to the drawing board.”

A few lines tucked into the education bill would allow school districts, when laying off teachers for economic reasons, to do so on the basis of performance evaluations rather than seniority. That measure is deeply opposed by school unions in Philadelphia and Pittsburgh.

Jerry Jordan, president of the Philadelphia Federation of Teachers, said the provision would be damaging.

“It’s really opening the door to a selective and abusive employer practice,” said Mr. Jordan, whose support was crucial to Mr. Wolf’s gubernatorial win. “It’s subjective and arbitrary.”

The union objects to the evaluation system generally; under it, Mr. Jordan said, teachers who were judged exemplary by their principals can end up with “needs improvement” ratings overall because they work in struggling schools. Such teachers could, in theory, be laid off, he said.

The teachers’ union in Pittsburgh expressed similar concerns. Its president, Nina Esposito-Visgitis, said in a statement that the layoff provision was “horrifying” and urged the governor to veto the bill.

In addition to outlining the formula to calculate spending for districts, the education-code bill also includes language that requires training for newly elected school board members and charter school trustees; a provision delaying a rule that high school students must pass standardized tests to graduate; and language that prohibits “lunch shaming,” meaning districts must provide students with food even if the students owe money. Source

Oct 28, 2017
nbcphiladelphia.com
Budget Bills Are Ugly But Pennsylvania Gov. Tom Wolf Has Little Choice But to Sign

Pennsylvania’s House of Representatives had passed an aggressive, bipartisan gambling expansion bill an hour earlier when Democratic Gov. Tom Wolf’s top budget adviser walked by the chamber’s Democratic leader in the Capitol’s ornate Rotunda. “Thank you,” he told Minority Leader Frank Dermody, D-Allegheny.

It was perhaps the most polite thing said about Pennsylvania’s ugly budget process and a Frankenstein-like assortment now sitting on Wolf’s desk: The gambling bill, a $140 million tax package and $1.5 billion borrowing measure to bail out the state’s finances.

There were no celebratory press conferences for the borrowing and gambling, no flood of credit-taking and no visible elation.

Despite their distaste for it, lawmakers say it puts the state on sound financial footing for the foreseeable future after fighting persistent deficits since the recession. This year’s projected deficit was particularly acute: $2.2 billion, driven largely by Pennsylvania’s biggest post-recession shortfall.
It props up a $32 billion bipartisan spending package, and could ease whatever fiscal challenges emerge ahead of next year’s election when voters decide on Wolf’s re-election bid, plus contests for most legislative seats.

Wolf hasn’t said whether he’ll sign the bills, hundreds of pages of legislation that flew through the Legislature this past week after months of stalemate pitting Wolf, Senate Republican leaders and Democratic lawmakers against the House Republican majority’s huge conservative bloc. Read more

Oct 27, 2017
Penn Live
A dozen ways Pa.’s 2017-18 state budget may impact your life

With all the pieces of the 2017-18 state budget now through the General Assembly and awaiting action by Gov. Tom Wolf, it’s a good time to look back at this $32 billion spending and revenue package as a whole and see how it could change life in Pennsylvania.

The following points out 12 ways that state residents would notice the impact of this budget as they go about their lives,  Read more

Oct 25, 2017
The Inquirer
More borrowing, more gambling: How they’re breaking budget impasse in Harrisburg

HARRISBURG — More borrowing, more casinos, and a few more taxes.

That is the solution the Republican-controlled legislature has devised to balance Pennsylvania’s budget and break a stubborn stalemate that has hurt the state’s financial standing and tested political alliances.

Lawmakers in both chambers worked late into the night Wednesday to approve key pieces of a long-overdue revenue package to fund the state’s $32 billion spending plan and close a more than $2 billion deficit.

The overall deal relies heavily on borrowing and siphoning money from various state funds reserved for special programs.

It also includes a still-to-be-approved plan for a major expansion of gambling in Pennsylvania, including legalizing online gambling, authorizing 10 new “mini-casinos” around the state, and permitting so-called video-gaming terminals at truck stops. Late Wednesday, the Senate had passed the gambling bill and the House had started debating it, with most of the discussion centered on whether to postpone a vote on the matter so members could have more time to read the 939-page bill.

The debate was expected to continue Thursday morning.

Gov. Wolf has not endorsed the revenue deal and late Wednesday would say only that he would review it.

But Senate Majority Leader Jake Corman (R., Centre) signaled optimism earlier Wednesday evening: “This should bring closure to the budget.”

Wolf has said he would be willing to sign off on up to $1.5 billion in borrowing as long as the legislature approved plans to raise significant new revenue for the cash-strapped state.

But aside from the gambling expansion, the revenue deal does not include any big-ticket money-generating taxes. Instead, legislators propose taxing the sale of fireworks and applying the state’s 6 percent sales tax to more goods sold on online marketplaces.

What it doesn’t include: a new tax on natural gas extraction that Wolf has pushed hard for and that the Senate approved earlier this year. GOP leaders in the House have refused to even allow a floor debate on it. Read more

Oct 21, 2017
newstribune.com
Pennsylvania’s budget fight will come with its own price tag

HARRISBURG, PA.
Pennsylvania state government’s projected $2.2 billion deficit, and a protracted fight over how to fix it, will come with its own special price tag.

The final cost is a moving target, and whether or how the fight will end remains unclear, now nearly four months into the state’s fiscal year.

But the state stands to shell out hundreds of millions of dollars in the coming years, considering the prospect of long-term borrowing to finance the deficit, compounded by a credit downgrade last month.

“That’s almost undeniable when you’ve got the downgrade and the borrowing,” said Auditor General Eugene DePasquale, a Democrat who is the state’s independently elected fiscal watchdog. “And regardless of the merits of any of the proposals, there’s extra costs that wouldn’t exist if you had a balanced budget passed.” Read more

Oct 19, 2017
Penn Live
Halting progress continues on Pa. budget front as exasperation grows

It may be the one thing that could help to drive the budget stalemate to a conclusion.

Senate Majority Leader Jake Corman said the House of Representatives’ funding plan to address the $2.2 billion revenue gap in the 2017-18 state budget is unlike the revenue package his chamber passed in July. But it holds the advantage of having won 102 votes in the House.

That alone makes it deserving of serious consideration, said the GOP senator from Centre County. The Senate could possibly consider action on the House plan as early as Monday.

“I just want to get done,” Corman told reporters on Wednesday. “We need to get this accomplished. We need to get it done and that’s really the one thing that’s leading us to really trying to take a serious look at this and be as supportive as we can.”

The House on Tuesday evening voted 102-88 on a revenue bill that relies mostly on borrowing and a set of small tax increases to raise $1.6 billion. That is a major part of its $2.2 billion plan that includeslegalized gambling expansion, one-time fund transfers and other accounting maneuvers.

A House committee on Wednesday passed legislation by a 16-9 vote to impose a new tax on natural gas production from the Marcellus Shale formation as proposed could also supplement the chamber’s revenue plan.

Despite his opposition to a shale tax, House Majority Leader Dave Reed, R-Indiana County, promised the legislation will get its day on the House floor to be debated but when that occurs remains in question.

Borrowing is in but how much?

This latest iteration of a House revenue plan has some similarities to a funding package the Senate passed in July although it includes none of the Senate’s new taxes on natural gas consumption, electricity or cell phones.

Both plans, for one thing, relied heavily on borrowing against future revenues due Pennsylvania from the 1998 multi-state settlement with big tobacco companies. The Senate plan proposed borrowing $1.3 billion and the House plan, $1.5 billion.

The increased borrowing is a cause for concern for senators as is the aggressive revenue estimates that the House is counting on from the yet-to-be-determined expansion of legalized gambling, Corman said. The House estimates the new gambling options will raise $265 million this year.

Still, Corman said that uneasiness for senators has to be balanced against a certain realization.

“The likelihood of us amending it and sending it back and getting 102 votes for something else, I think, is a long shot at best. So we want to be as supportive as possible,” he said.

Senate Democratic Leader Jay Costa of Allegheny County said his caucus is reviewing the House’s borrowing plan but needs to analyze it as part of a comprehensive proposal including the fund transfers that the House wants to use to balance the budget.

“In the coming days, we’ll be working internally as a caucus, but also with our colleagues across the aisle and with the governor’s office,” he said..

While the Senate Republicans and Democrats takes the next few days to review the plan, senators also want to hear whether Gov. Tom Wolf plans to continue with the executive actions he announced recently to balance the budget even if they send him a legislative-crafted revenue package.

Wolf announced his plan to raise $1.2 billion by borrowing against future anticipated payments from the Pennsylvania Liquor Control Board and $200 million from leasing the Pennsylvania Farm Show Complex & Expo Center in Harrisburg to a private operator.

At this point, the governor is proceeding with his plan to ensure the commonwealth meets its commitments to school districts, human services and other providers, said Wolf spokesman J.J. Abbott said.

“When a final plan from the Legislature reaches his desk, he will evaluate the pieces,” Abbott said. “Governor Wolf is open to a responsible alternative, but feels it is necessary that he ensure we meet our commitments.”

Corman told reporters he was concerned the governor may go down a dual track of borrowing against future LCB payments even if the Legislature sends him a revenue plan that securitizes tobacco settlement payments.

“Nothing would stop him from doing it since he’s doing it on his own anyway,” Corman said. “So we would like before we jump into this proposal to just get a little clarity on some of these issues.”

Obstacles to overcome

Despite this week’s developments on closing out the belated state budget, there remains some obstacles that could still derail the effort.

Corman said the Senate has no appetite for allowing slots-like video gaming terminals in truck stops to generate revenue to help fund the budget. Instead, it favors allowing a limited number of satellite casinos to open up around the state.

Reed said the House’s revenue plan looks to gambling expansion to raise $265 million. “That is not accidental,” he said. “We need that amount of revenue” to complete funding for this year’s budget and provide $600 million for Penn State, Pitt, Temple and Lincoln universities and University of Pennsylvania’s veterinary school, which continues to hang in limbo.

“We’ll wait and see as we get to the final negotiations on a gaming bill what’s actually in and what’s actually out,” Reed said.

The highly controversial shale tax also remains a hurdle to cross.

The Senate’s revenue plan included a natural gas severance tax that had a slightly lower rate than the one that the House Finance Committee supported but floats based on the market price of the natural gas produced.

The House committee-approved rate would generate $200 million to $250 million for the general fund, said Rep. Gene DiGirolamo, R-Bucks County, who championed the measure in the House. That compares to $108 million that the Senate’s rate is estimated to produce.

But along with a disagreement over where that tax rate should be set is the side issue of gas industry-friendly regulatory and permitting reforms included in the Senate plan but absent in the House version of severance tax legislation.

“If we’re going to go down that road as we said all along, looking at the industry as a whole is important and permitting reform has to be part of it or it’s not something we could support,” Corman said.

House members during the committee discussion indicated that the bill was a starting point for the chamber’s discussion of this issue that has been percolating for the past decade.

“This, at least in my view, is not the final product,” said Rep. John Lawrence, R- Chester County, adding he for one plans to introduce some amendments during a promised House debate. “I do believe this is something the people of Pennsylvania want the Legislature to take up a discussion on.”

t’s not clear whether the shale tax can be wedged into a final revenue plan for this fiscal year but Senate Democrats and Wolf seems to be keeping that hope alive based on a statement he made following the committee vote.

“I urge House leadership to bring the severance tax to a vote on the floor as soon as they return to Harrisburg next week,” he said. “This is a fair and commonsense proposal that will address our structural budget deficit. Pennsylvania is the only natural gas producing state without a severance tax and the vast majority of the tax would be paid out of state.”

The House and Senate are scheduled to return to session next week. That is the last scheduled session week before the break for municipal elections in November.  Source

Oct 15, 2017
The Seattle News
Pennsylvania explores new territory in budget fight

HARRISBURG, Pa. (AP) — Pennsylvania’s deficit-riddled finances are in new territory, as Democratic Gov. Tom Wolf assembles a package to balance the state’s budget without involvement from a Republican-controlled Legislature riven by ideological and provincial disputes.

Three-and-a-half months into the state’s fiscal year, Wolf has bypassed a Legislature that hasn’t sorted out a way to finance a nearly $32 billion budget bill it passed June 30. Instead, he is working on a $2.2 billion budget-balancing strategy that relies heavily on borrowing to get the state through the year. Read more

Oct 14, 2017
New Castle News
Lawmakers skeptical of Wolf’s budget bailout

HARRISBURG — The Liquor Control Board has taken the first steps to borrow $1.25 billion to help balance the state budget, but many lawmakers remain unconvinced of the strategy.

After the state House failed to pass a series of potential fixes to the budget, Gov. Tom Wolf, in frustration, abruptly announced Oct. 4 that he will pay the bills by borrowing against future liquor sales.

Under this plan, Wolf estimated that at 4 percent interest, it would cost the state around $85 million a year in debt payments over the next two decades to borrow the funds necessary to balance the budget.

The Liquor Control Board said its annual payment to the state has topped $200 million every year in the last decade.

The Liquor Control Board on Wednesday announced that it was having legal staff review how to proceed.

“We understand the urgency driving this issue for the Governor’s Budget Office, and we are working as quickly as possible to contract with legal and financial advisors well-versed in this kind of transaction,” said LCB board member Michael Newsome in a statement.

But the plan comes as the system absorbs dramatic changes to the state’s liquor law, with an increasing number of grocery and convenience stores now able to sell wine, as well as beer. The wine sales set them up in direct competition with the state-run liquor stores. In 2015-16 before the state Legislature loosened the rules on where wine can be sold, wine accounted for about 36 percent of the sales at the state stores, LCB data shows.

Last year, locations with wine-expanded permits, including grocery and convenience stores, accounted for about 5 percent of wine sales, said Elizabeth Brassell, an LCB spokeswoman.

“It’s unfortunate we need to look at borrowing” to balance the budget, said state Rep. Tedd Nesbit, R-Mercer County.

The move to borrow against the proceeds of liquor sales will also create a long-term handicap to any future move to further privatize the system, Nesbit said.

Wolf said the bond could be “callable,” meaning the state could pay off the debt early, if there was a reason to do so. But the cost of paying off the debt could make it “impractical” to move away from having the state running the wine and spirit stores, Nesbit said.

Auditor General Eugene DePasquale on Thursday said Wolf’s plan “has some merit,” though he added that “I’d be stunned” if someone doesn’t file a lawsuit trying to stop the proposal.

DePasquale added that he has no specific information that a lawsuit is planned, but suggested that the controversial nature of the proposal suggested it was ripe for a legal challenge.

DePasquale said he’s much more certain of the merit of the governor’s plan, announced Monday, to lease the Farm Show Complex in Harrisburg to a private operator. Under the plan, the state would get $200 million in an up-front payment, while maintaining control of the facility, which is home to the Farm Show and a variety of other events throughout the year.

DePasquale said he can find no evidence that his office needs to approve either plan and said as the negotiations over how to balance the budget have dragged on, there are few good solutions left.

“I can’t stress enough, this isn’t an ideal situation,” he said.

State Rep. Fred Keller, R-Snyder County, said that he objects to the fact that the borrowing is being used to pay off a debt.

“If we were getting a tangible asset, I could make an argument for it,” he said. “But after 20 years what are we going to have? Nothing.”

Keller said he hopes the state House moves to get the governor and Senate to pass legislation that would tap money House lawmakers say is sitting unused in reserve funds, while borrowing against the state’s tobacco settlement payments.

The tobacco settlement money goes toward health programs, including payments to hospitals to cover their costs of providing care to people who can’t pay.

Keller said that the Legislature would have to figure out how to replace that funding, but it wouldn’t involve forcing one government agency, like the Liquor Control Board, to absorb the full burden of debt.  Source

Oct 8, 2017
pennlive.com
‘Tax killers,’ Libre and cellphones: Why the Pa. budget is 100 days late

Lawmakers beat their chests over passing a $32 billion spending plan for 2017-18 on June 30, the last day of the 2016-17 fiscal year. They figured it wouldn’t take long, maybe a week or two, to agree on how to pay for it. (And how to fill the $2.2 billion revenue deficit built into it).

How’d that work out?

Today marks the 100th day without a completed general fund budget. So the staff at PennLive set our minds to figuring out why that is. Here are some reasons that might explain why the governor and lawmakers can’t get this basic job done:  Read more

Oct 4, 2017
Pennlive.com
Gov. Tom Wolf, angry about budget deadlocks, will turn to liquor stores to close deficit

Gov. Tom Wolf threatened unilateral action to help close the state’s budget deficit Wednesday, as another negotiated settlement with legislative Republicans faltered in the face of statewide opposition.

“This is not the way government is supposed to work. But I have to make sure that Pennsylvanians are not hurt, so I’m going to have to act to protect the investments that we all made earlier this year,” a visibly angry Wolf said in a mid-afternoon press conference at the Capitol.

Wolf said he would first seek to raise $1.2 billion in cash by borrowing against future anticipated payments from the Pennsylvania Liquor Control Board, the operators of the state’s liquor monopoly.

That, the governor said, would be used to pay off a lingering deficit from the 2016-17 fiscal year.

Looking to the current fiscal year, the governor said he would use his executive powers to “manage” state government and the $32.0 billion budget that funds it as best he can, in tandem with the revenues that are already coming in.

That left the door open to some spending freezes and personnel moves.

But Wolf stressed he would do everything he can to ensure that core services like aid to schools, public safety functions and funding that supports vital human services like drug and alcohol treatment are uninterrupted.

The unilateral actions were triggered by a persistent failure between the Democratic governor and the Republican-dominated state legislature to reach agreement on a plan to close a $2.2 billion gap between state spending and expenses.

All sides agreed to a $32.0 billion spending plan in late June; they have been stalemated ever since in their quest to raise $2.2 billion to pay for it.

Wednesday’s extraordinary moves are not a fait accompli.

Wolf’s Budget Secretary Randy Albright said that the PLCB borrowing would likely take about two months to close.

That leaves a window for the budget talks between Wolf’s administration and the Republican-controlled legislature to resume, and Wolf himself said he would still prefer to complete an agreed-to package.

But after several false starts – including the apparent implosion of a proposed 5 percent statewide tax on hotel rooms earlier Wednesday – an angry Wolf said he had to take action on his own.

“I’ve had enough of the games,” Wolf said, directing special anger at the 121-member House Republican caucus, whose strong anti-tax fervor has blocked several proposed tax increases Wolf believes are needed to eliminate a recurring gap between state spending and revenues.

“So I’m going to manage the finances of the Commonwealth until the House sees fit to do what it’s supposed to do.

“There will be some things that are going to be harder to do in the absence of that recurring revenue. I can’t tell you exactly what those things are,” Wolf continued.

“But the basic things that we committed ourselves to in June – protecting education at all levels, protecting seniors… doing what we need to to keep Pennsylvania in the forefront of fighting the opioid epidemic – I’m going to continue to do everything in my power to address those issues.”

It seemed that the most likely immediate step would be a needed cooling-off period between all parties.

House leaders, after a fiery session that included rejection of a move to force debate on a natural gas severance tax, engaged in a round of finger-pointing, with Republicans and Democrats blaming each other for failing to provide enough support for the hotel tax bill.

House Democratic Leader Frank Dermody, D-Allegheny County, blamed the Republican majority for failing to rally around tax proposals that they had insisted on as alternatives to a shale tax.

“Here we are today with the governor having to manage our problem because the House Republicans won’t be responsible, and won’t work with others to solve the problem,” Dermody said.

House Majority Leader Dave Reed, R-Indiana County, countered that Republicans have given full support to several non-tax revenue proposals centered on gambling expansion and liquor reforms.

It had always been understood, he said, that Democrats would have to provide a majority of the votes for any tax increase, and they failed.

Reed later gave voice to the rising exasperation in a stalemate that has already cost the state government a credit downgrade and caused a temporary delay in some bill payments.

“This doesn’t sound like a governor who actually wants to get a budget done, but look, if he wants to securitize the revenues from the LCB, so be it,” Reed said. “It beats tax increases. so we’ll accept it.”

Albright said Wolf will be able to complete the liquor borrowing with the Liquor Control Board’s approval.

LCB members Tim Holden, Mike Negra and Michael Newsome pledged their cooperation with the governor Wednesday afternoon, releasing a joint statement that said in part:

“Although we have yet to discuss the proposal as a board or begin to delve into details of a potential arrangement, we pledge to work collaboratively with the governor’s budget office to explore a revenue-backed contract to deliver significant immediate revenue while capitalizing on the PLCB’s long-term profitability.”

While exact terms need to be negotiated, Albright said one model shows an annual extra cost of about $85 million that would be swept off the future proceeds from the liquor system.

Those payments would not take effect until the 2019-20 fiscal year, but would create that added cost to the Commonwealth from that point on.

Intentional or not, Wolf’s plan is also a possible finger in the eye to House Speaker Mike Turzai, R-Allegheny County, and the de facto leader of the House’s tax resistance movement.

Turzai is a passionate crusader for privatization of the state store system; this securitization could as a practical matter, foil any further privatization efforts for years to come.

If it comes to that.

Wolf stressed Wednesday that despite his instant irritation, he is still open to a negotiated solution. If one is reached, passes the General Assembly, and reaches his desk, he said he can call off his emergency plan.

“If at any point in time they (the House) come up with a budget that passes muster with the Senate and that I can sign on to, yeah, I will move to that because that’s going to give me the revenues that I need to make sure that all these things are protected.

“In the absence of that, I’m going to do the best I can.”

Source

Sept 13, 2017
PennLive
State House passes $2.2 billion special funds transfers and borrowing plan to fill Pennsylvania budget hole

Note: The PA House recessed for the summer to wait till Sept 13 to pass this bill.

Special funds listed here

The Pennsylvania House has passed a $2.2 billion revenue plan that should, at the least, serve as a re-set for budget negotiations that have been stalled through most of the summer.

The bill is the majority House Republicans’ belated, no-new-taxes answer to a Senate plan passed with the endorsement of Gov. Tom Wolf in July that would have imposed new taxes on energy consumption and natural gas production.

The House plan, which passed 103-91, is a classic example of majority rule:

All the ‘yes’ votes came from members of the 121-member Republican majority, after several days of intense, intra-caucus negotiations. Fifteen GOP members joined all 76 Democrats present in voting ‘ Read more

Sept 12, 2017
usnews.com
Pennsylvania House GOP Hits Wall on Budget-Balancing Plan
Pennsylvania’s House of Representatives is preparing to take preliminary votes on measures designed to plug state government’s $2.2 billion budget gap with money siphoned partly from public transportation and environmental improvement programs.

HARRISBURG, Pa. (AP) — Stymied by dissension among Republicans, Pennsylvania’s House of Representatives put off preliminary votes Tuesday on measures designed to plug the state government’s $2.2 billion budget gap with money siphoned partly from public transportation and environmental improvement programs.

Speaker Mike Turzai abruptly adjourned the chamber after a brief floor session, surprising some rank-and-file members of the House’s deeply divided GOP majority. The House was scheduled to return to session Wednesday, but it was not clear what the GOP majority’s next step will be in a budget stalemate now in its third month.

“Who knows?” said Rep. Scott Petri, R-Bucks. “We had our meetings, everybody staked out their position.”

The House GOP plan was written by anti-tax conservatives, but lacked enough support to pass the chamber. It is opposed by Democratic Gov. Tom Wolf, House Democratic leaders and southeastern Pennsylvania Republicans as a way to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by lawmakers in a $32-billion spending agreement.

Leaders of the Senate’s Republican majority also have given no sign they would support the House GOP’s plan to tap off-budget accounts, including those for public transit agencies, environmental improvements, farmland preservation and county emergency response systems. House Republican leaders were considering how to shrink their plan’s transfers to win enough support to pass the chamber, backers said.

Meanwhile, the House’s conservative Republican leaders were being pressed by House Democrats to allow a floor vote on a package of tax increases and long-term borrowing, roughly similar to a $2.2 billion revenue package that passed the Senate in July.

With the state’s main bank account scheduled to hit zero on Friday, Wolf’s administration is warning the eight insurers that administer benefits for 2.2 million Medicaid enrollees that they may not receive their monthly payments of about $800 million on time.

That would force insurers to borrow money to make timely payments to hospitals, physicians and pharmacies that are required by federal law, said Michael Rosenstein of the Pennsylvania Coalition of Medical Assistance Managed Care Organizations.

It would be the first time Pennsylvania state government has missed a payment as a result of not having enough cash, state officials said.

Since the recession, Pennsylvania state government has reliably bailed out its deficit-ridden finances by borrowing money from the state treasury or a bank during periods when tax collections are slow.

However, this year, Wolf has warned that he is out of options to pay bills on time, and a Tuesday letter to Wolf and state lawmakers from Pennsylvania’s two independently elected fiscal officers — Treasurer Joe Torsella and Auditor General Eugene DePasquale — underscored that.

In the two-page letter, Torsella and DePasquale said they are “disinclined” to authorize the state to borrow money as long as the state’s budget is out of balance. A loan would help the state make its payments on time until the spring, when a large volume of tax collections is due.

But it would also contribute to an “economic ‘moral hazard’ that effectively increases the long-term risks to the Commonwealth’s finances,” Torsella and DePasquale wrote.  Source

Sept 11, 2017
The State
Pennsylvania House returns, with fight over $2.2B unresolved

HARRISBURG, PA.
Pennsylvania’s House of Representatives returned to the Capitol on Monday for its first session in seven weeks, but a divided Republican majority argued over a new budget-balancing plan and provided no sign that a two-month budget stalemate will end anytime soon.

The session gave members of the House’s Republican majority their first chance as a group to discuss a plan aimed at balancing the state’s threadbare budget, although it is opposed by House Democratic leaders and Democratic Gov. Tom Wolf, who called it “nonsense.”

The plan would avoid the borrowing, casino gambling expansion and utility service tax increases that underpins a $2.2 billion revenue package the Senate approved in July. That Senate’s package was meant to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by lawmakers in a $32 billion spending agreement with Wolf, but it is deeply unpopular with House members.

The new House GOP plan leans heavily on siphoning money from off-budget accounts that support public transportation systems and environmental cleanups and improvements.

House Republican backers insist the money can be diverted without affecting the programs, but the Wolf administration has contradicted that. Wolf’s administration also has said that another $400 million in operating reserves counted in the House GOP plan simply does not exist.

The plan would avoid raising taxes, other than extending Pennsylvania’s 6 percent sales tax to third-party sales in online marketplaces.

A vote could occur as early as Tuesday. But, after three hours of closed-door discussions among House Republicans on Monday, it was not clear whether the House GOP plan has enough support to pass the chamber. Rep. Jeff Pyle, R-Armstrong, called it a “coin flip,” while Rep. Eugene DiGirolamo, R-Bucks, said debate had been “back and forth” between supporters and opponents.

The Republican caucus is badly fractured between its anti-tax conservatives and southeastern Pennsylvania moderates who want a floor vote on legislation authorizing a Marcellus Shale natural gas production before they join other budget-balancing measures. Some Republicans would be satisfied by paring back approved spending by $2 billion, while some Republicans say an income tax increase is necessary to fix state government’s entrenched post-recession deficit.

House Speaker Mike Turzai, R-Allegheny, informed rank-and-file lawmakers that they would remain in Harrisburg until a revenue package passes.

If this latest plan fails, it’s also not clear what happens next. Hanging in the balance is another downgrade to Pennsylvania’s battered credit rating and about $600 million in annual aid to four universities — the University of Pittsburgh and Penn State, Temple and Lincoln universities — that give tuition breaks to in-state students.

Since the fiscal year beginning July 1, Wolf’s administration has borrowed money from other state funds to keep the state’s main bank account above zero. However, with tax collections at a seasonal low flow, Wolf has warned that he is out of options starting this coming Friday to make payments on time.

Wolf supports the Senate’s plan. That plan is built on borrowing $1.3 billion against Pennsylvania’s future proceeds from the 1998 multistate settlement with tobacco companies, raising $400 million worth of taxes on consumers’ utility bills and mounting another huge expansion of casino-style gambling. It also includes a Marcellus Shale production tax.

If lawmakers do not scrounge more money, the state’s largest teacher’s union warned that a nearly $1 billion cut to public school aid is possible. That would force schools to lay off teachers again, much as they did to survive a nearly $1 billion cut to aid in 2011, Dolores McCracken, president of the Pennsylvania State Education Association, told a liberal group rallying in the state Capitol on Monday.

“Overcrowded classrooms have now become the norm,” McCracken said, “and students are paying the price.” Source

Sept 10, 2017
cumberlink.com
House GOP to test budget-balancing plan in growing stalemate

HARRISBURG — The Pennsylvania House of Representatives will return to session Monday for the first time in seven weeks as a lengthening budget stalemate is drawing warnings by Democratic Gov. Tom Wolf that he is out of options to make payments on time.

Hanging in the balance is $2.2 billion in program funding — about 7 percent of approved spending — and another downgrade to Pennsylvania’s battered credit rating.

At issue is how to come up with the money to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by Republican and Democratic lawmakers in a $32 billion spending agreement.

A vote is expected this week on the latest plan, pushed by a group of House Republicans. If it fails, the next step is unclear for the House, led by Speaker Mike Turzai, R-Allegheny.

The deficit
The Republican-controlled Legislature is averse to the kind of tax increase that would stabilize Pennsylvania’s deficit-riddled finances. Wolf has pledged to squeeze out savings from his workforce, health care costs and prisons, but it’s nowhere near enough, and lawmakers are in little mood for deep spending cuts.

This year, they approved what amounted to 3 percent spending increase, including nearly $600 million in annual aid to five universities — Penn State, Pitt, Temple, Lincoln and the University of Pennsylvania’s veterinary school — that is part of the bipartisan spending agreement, but awaiting final votes.

Since the fiscal year begin July 1, Wolf’s administration has borrowed money from other state funds to keep the state’s main bank account above zero. Come Friday, Wolf may need to start postponing payments.

The latest plan
This plan, developed by about two dozen House Republicans, would divert cash from reserves or off-budget programs, many of them for public transportation or environmental cleanups and improvements. Read more

Sept 7, 2017
The Daily Item
Today’s Editorial: Governor issues freeze warning

Gov. Tom Wolf said this week that state lawmakers will have just a few days to pass a revenue package to balance the state’s $32 billion budget before the state will begin to “get hurt” by the financial crisis.

During an interview in Pittsburgh, Wolf said he will have to start freezing some spending by Sept. 15 to prevent the state’s main bank account from dipping into red ink. Freezing spending could affect roads, schools, emergency response systems and volunteer fire companies, the governor warned.

Meanwhile, a group of rank-and-file House Republicans presented a plan to fill the state’s $2.2 billion projected deficit by diverting cash from off-budget programs.

Their plan leans heavily on siphoning money from a public transportation system fund and programs aimed at environmental cleanups and improvements. House Republican supporters insisted the money could be diverted from surpluses without affecting the programs, but the Wolf administration disputes that.

The Republican efforts to comb through budgetary accounts in search of dormant funds are noble, but mistimed.

State lawmakers have about four months from the time the governor presents a budget proposal in February until the June 30 deadline for adopting a new state budget. That would seem to be the appropriate time to identify and debate spending allocations. Doing so on the brink of a financial crisis resulting from indecision and inaction is not.

House Minority Leader Frank Dermody, D-Allegheny, questioned the legality of “raiding” accounts that, he said, are restricted by law. The Wolf administration also questioned the plan’s reliance on $400 million in unused program cash leftover from last year while the House GOP plan raised the prospect that it would include nearly $200 million in cuts to spending already approved, some of it for hospitals, public health programs and job training.

Wolf supports the state Senate’s revenue package, which relies on a new tax on Marcellus Shale natural gas production and prospective licensing fees by authorizing another expansion of casino gambling across Pennsylvania.

No votes are scheduled for this week, and the Republican-controlled House is scheduled to return to Harrisburg on Monday for the first time since July 22.

It is well past time for state House members to finish their primary duty — sewing up the state budget before anyone else gets hurt. Source

Sept. 5, 2017
Pennbpc.org
PRESS MEMO: On the PA House GOP Budget Plan to Raid Special Funds

MEMO

To: Editorial Page Editors, Editorial Board Members, Columnists, and Other Interested Parties

From: Marc Stier, Director, Pennsylvania Budget and Policy Center

Date: September 5, 2017

Re: On the PA House GOP Budget Plan to Raid Special Funds


The budget plan released today by a group of Republican House members fails in the most important task before our state today: to resolve the long-term structural imbalance between expenditures and revenues. Even if every fund transfer proposed by the Republican back-benchers today were Constitutional and legal, and even if they had no impact on the commitments made by the General Assembly to provide funding for public purposes, this one-time transfer will provide almost no recurring revenues to support the state’s on-going commitments. Even if this proposal made sense, it leaves us facing a deep deficit next year — one that would grow deeper every subsequent year.

However, the plan released today is also dishonest. It claims that it will not reduce state expenditures on programs created by the General Assembly. As far as we can tell from the sketchy details offered, that is simply untrue. The Republicans have called the state’s special funds a “shadow budget.” What they offer today is really a shadow budget cut that may well total hundreds of millions of dollars. Many, if not most, of the fund transfers they propose are larger than both beginning or ending balances of the funds in question, which means that their plan cuts spending that the General Assembly has previously approved. But, rather than openly debate these programs, the group of Republican House members have called for cutting them without acknowledging that this is, in fact, their plan.

In addition, in some cases, the plan transfers monies that have been received by these special funds by bond issues. We believe that this is illegal.

We will have more details about the specific problems in the Republican proposal later. Here we just want to point to some examples of the disparities between what the Republicans claim about their plan and the truth of the matter:

  • The proposal raids $30 million from the PA Infrastructure Bank. This will lead to a reduction in loans for qualified transportation projects of at least $17.5 million.
  • The proposal raids $25 million from the Small Business First Fund, which provides loans to small businesses to help them comply with environmental regulations or adjust to defense cutback. The balance plus new revenues from principal and interest repayments only totals $19 million. This transfer will basically end this state program.
  • The proposal raids $75 million from the Recycling Fund, which funds “recycling and planning grants, market and waste minimization studies, and public information and education activities” and also finances the cleanup of illegally deposited waste on state forest. This will lead to at least a $25 million reduction in state spending for these purposes.
  • The proposal raids $357 million from the Public Transportation Trust Fund, which receives revenue from Turnpike tolls and other sources and provides dedicated operating and capital funding for public transit. This will necessarily require about a $100 million reduction in expenditures from the Fund.
  • The proposal raids $50 million from the Hazardous Site Clean Up Fund, which finances cleanup and restoration of abandoned hazardous waste sides. This will require a reduction of $11 million in spending this year.
  • The proposal raids $100 million from Keystone Recreation Park and Conservation Fund that comes from dedicated bonds as well as tax revenues, which funds acquisitions, improvements and expansions of commonwealth and community parks, recreation facilities, historic sites, zoos, public libraries, nature preserves and wildlife habitats. This will eliminate the $95 million in spending from this fund this year.
  • The proposal raids $25 million from the Banking Fund, which receives funds from fees, assessments, charges and penalties collected or recovered from persons, firms, corporations or associations under the supervision of the Department of Banking Securities. While here the Republicans may have found a real surplus, there is a reason for it: to have funds available in case a of seizure or liquidation of a financial institution, association or credit union. It is good government to maintain this surplus.
  • The proposal raids $120 million from the Multimodal Transportation Fund, which receives revenue from Turnpike tolls, motor vehicle fees, and the Oil Company Franchise Tax in order to fund passenger rail, rail freight, ports and waterways, aviation, bicycle and pedestrian facilities, roads and bridge. This would eliminate $90 million in state spending.

There are other examples of budget cuts masquerading as the transfer of surplus funds, which we will detail soon. In addition to the shadow budget cuts found in these “fund transfers,” the Republican proposal includes two other hidden budget cuts. The first is the $189 million the Governor has put in reserve until the budget is funded. This is spending that was part of the budget many of these Republicans voted for in July. They thus propose converting a temporary action by the Governor into a permanent budget cut. The second is the roughly doubling of savings expected from lapsed funds. In many cases, funds that could not been spent in a budget year are spent in the next year for purposes designated by the General Assembly. Source

August 28, 2017
abc27.com
House GOP members say they can balance budget without borrowing or taxes

HARRISBURG, Pa. (WHTM) – “What we’re doing is probably the last rabbit in the hat,” state Rep. Dan Moul (R-Adams) said Monday afternoon.

The magic act to which Moul is referring is a balanced budget without borrowing and without tax increases.

He says he and a handful of fellow conservative Republicans can make money appear out of thin air; enough, they say, to put the 2017-18 spending plan to bed.

No sleight of hand, no illusion; Moul says he and his cohorts pored over pots of money, funds, and idle accounts and discovered the state’s sitting on billions of dollars. He refused to release specifics but promised to in the very near future.

“Why would you go borrow the money and pay interest on money and raise taxes if you have taxpayer money sitting right there?” Moul asked.

The Senate passed a $32 billion revenue plan that included borrowing, an extraction tax on Marcellus Shale drillers, and a tax on utility bills and cell phones. Moul says it has no home in the House.

“Some people say the Senate budget was DOA, dead on arrival. I say it was DBA, dead before arrival,” he said. “It was dead before it even got out of there.”

Skeptics steal a line from the movie “Jerry Maguire” and say, “show me the money.” They insist that all of those pots of money that Moul and his friends want to raid are protected, and the money is raised from a specific source and must be spent on a specific project, not the whims of the legislature.

Senate Republican leadership is also not happy at the budget brinksmanship. They put up a tough tax vote and zigged. They don’t appreciate that House Republicans are now zagging.

“Are there savings to be had?” asked Senate President Pro Tempore Joe Scarnati (R-Jefferson). “Absolutely, but you don’t start talking about this stuff in August. You have to be doing something when we’re in legislative session doing policy changes and that’s my real complaint. You can’t just govern on these sound bites about saving billions of dollars.”

It should be noted that both chambers agreed overwhelmingly to the spend number and now are failing to agree on how to fund it.

“Did you vote for the $32 billion budget?” Moul is asked.

“I’m gonna confess and say yes, I did, but I thought we had the revenues in place,” Moul said. That’s why he then spearheaded a deep dive, with several others, into the budget and possible pots of money that can be raided.

“I felt responsible, so I’m gonna go in there until I figure this out and I think we figured it out,” he said, again refusing to release specifics yet on where the treasure is buried.

Moul is a rank-and-file member who says he and several colleagues are tired of repeatedly waiting for the handful of legislative leaders to come up with a budget deal.

“My constituents deserve somebody who’s willing to stick with it until we get it resolved,” Moul said. “They didn’t hire a bench warmer. They want somebody in the game. I’m in the game.”

He promises new rules to the game moving forward; chief among them: don’t agree to a spend number without knowing how it’s being funded.

“Those days are gone,” he said. “We learned our lesson. It’s not gonna happen again.”

Moul and his budget hawks are expected to lay out their budget plan for House leadership Tuesday and Wednesday and hope to take it public by the end of the week. Source

August 27, 2017
Pittsburgh.cbslocal.com
What Will The House Do? It’s Pennsylvania’s $2B Question

HARRISBURG, Pa. (AP) – The question of what Pennsylvania’s House Republican majority will do about a $2.2 billion hole in the state budget is sending ripples of worry through some quarters.

Maureen Cronin, of the Arc of Pennsylvania, says staff from Arc chapters around the state call her and ask whether it’s turning into another nine-month stalemate that played out two years ago between lawmakers and the Democratic governor.

House GOP leaders have been quiet since July’s Senate passage of a bipartisan revenue plan that Gov. Tom Wolf supports.

Many House members dislike the Senate plan. Republican Rep. John Taylor, of Philadelphia, says House GOP leaders are waiting to see if rank-and-file members produce a solution.

Meanwhile, the government is operating normally. Come September, Wolf may need to start freezing program cash. Source

August 22, 2017
The Morning Call
Pennsylvania House Republican must get ‘act together’ on budget, Gov. Tom Wolf says

HARRISBURG — House Republican leaders should “get their act together” and return to Harrisburg to resolve a badly out-of-balance state budget that’s lingering seven weeks into the fiscal year and risking a downgrade of Pennsylvania’ battered credit rating, Democratic Gov. Tom Wolf said Tuesday.

Wolf said the state’s main bank account will “run out of cash” in three weeks — about the time a large Medicaid payment is due — as a result of a seasonal low-flow period of tax collections and an entrenched post-recession deficit.

The state has spending authority under a nearly $32 billion budget bill that lawmakers passed June 30, including with the support of 98 out of 121 House Republicans. Read more

August 29, 2017
The Inquirer
As Pa. budget impasse persists, Wolf warns of dire consequences

HARRISBURG — Gov. Wolf on Tuesday urged House Republicans to take swift action to balance the budget or risk putting Pennsylvania in a “much more dire financial situation” that could include painful spending cuts.

With a budget impasse about to drag into a third month, the Democratic governor has remained mum about what he would cut should the legislature not send him a plan to fund the $32 billion budget it passed two months ago.

But his budget office has been quietly churning out plans to deal with the financial difficulties. An internal administration document shows one dire scenario could cut 12 percent from nearly every department’s budget, including more than $700 million from public schools and nearly $282 million from the Departments of Health and Human Services for homeless assistance, mental health, and other programs. Read more

August 10, 2017
The Inquirer
Pa. House leader signals budget impasse likely to linger

HARRISBURG — House Majority Leader Dave Reed said Thursday that Republicans have serious concerns about some taxes included in budget bills passed by the Senate, the latest signal that their impasse could linger for at least a few more weeks.

“We respect the fact that they sent it over to us. We respect the fact that this is where the Senate is,” Reed, a Republican from Indiana County, told Capitol reporters. “It’s not where we are.”

The GOP-controlled legislature passed a nearly $32 billion spending plan on June 30 — inching in under a midnight deadline — but has since been unable to agree on a way to pay for it.

Negotiators have struggled with how to plug a $1.5 billion shortfall still lingering from last year’s budget and a $700 million deficit projected for the fiscal year that began July 1.  Read more

August 9, 2017
post-gazzette.com
Pennsylvania House Speaker Mike Turzai is taking heat for the budget stalemate

Tongue in cheek, Erin Kramer walked into Pennsylvania House Speaker Mike Turzai’s McCandless office Wednesday morning with a packed breakfast.

That’s what parents do to get their children out of bed and motivated, she said, so maybe it will work for Mr. Turzai, R-Marshall, who has become the face of the Republican-controlled legislature’s stalemate over the state’s $32 billion budget. With the House in recess until the end of August without a final plan to pay for the budget, Ms. Kramer, executive director of activist group One Pennsylvania, wanted to offer the speaker a ride to work a bit earlier than scheduled.

“I brought my Mom-mobile, my Chevy Hatchback,” Ms. Kramer said. “We’re going to invite [Mr. Turzai] to go to Harrisburg. I’m happy to drive. I have an E-ZPass.”  Read more

August 6, 2017
sfchronicle.com
Lawmakers move to protect own funds during budget stalemates

HARRISBURG, Pa. (AP) — Tax increase proposals drew most of the attention when the state Senate approved a package of legislation late last month designed to bring Pennsylvania’s budget stalemate to an end, but lawmakers also tacked on a provision that would give them more leverage during any future standoff with the governor.

The bill that passed comfortably and was sent over to the House would enshrine into law the power to take the type of actions made by lawmakers during a standoff two years ago, by giving them explicit power to borrow money to pay salary, benefits and bills if their reserves run dry during drawn-out budget negotiations.

The proposed changes to the Fiscal Code, long used as a catch-all for budget-related items, said money “available” to the House or Senate through “a short-term agreement or other instrument executed with a lending institution” would be considered “augmenting revenues” and could be used to pay bills and fund paychecks for lawmakers their staff.

The borrowed money would be deposited with the Treasury Department, which would then use it to fund the Legislature’s costs. It would be paid back once a deal is done. Read more

July 28, 2017
Pennlive.com
No budget yet: Pa. House majority starts ‘review’ of Senate/Wolf plan

This ain’t over.

That was the no-so-subtle subtext of a memo sent by leaders of the Pennsylvania House’s Republican majority to their 120-member caucus Thursday, hours after the Senate passed a $2.2 billion revenue package that included about $530 million in new taxes.

The Senate package – including new levies on natural gas production and consumption – passed through that chamber Thursday morning after several weeks of closed-door talks with Gov. Tom Wolf’s senior staff.

The Senate votes represented a brief moment of success in what has turned into a frustrating summer in Harrisburg.

But the House GOP leadership – which took a no-tax detour from those talks early last week – is not on board, so there is no ready-made expectation for what the next step will be.

“The amendments to these bills were neither agreed-to, nor shared with the House in advance of the committee meetings [late Wednesday, where the final language was inserted in the bills]. So we certainly have no intentions to rubber stamp these bills,” stated the memo issued jointly in the name of House Speaker Mike Turzai, R-Allegheny County, Majority Leader Dave Reed, R-Indiana County, and the rest of their leadership team. Read more

July 27, 2017
usnews.com
Pennsylvania Senate Approves Higher Taxes to Balance Budget

The Pennsylvania Senate has passed Republican-crafted legislation to balance the state budget that includes heavy borrowing and hundreds of millions of dollars in tax increases.

HARRISBURG, Pa. (AP) — The Pennsylvania Senate on Thursday approved a plan to eliminate a $2.2 billion budget deficit that includes heavy borrowing and hundreds of millions of dollars in tax increases, including on Marcellus Shale gas drilling, consumers’ utility bills and online purchases.

Floor votes came barely 14 hours after Republicans who control the chamber first unveiled their plan to balance the $32 billion state budget late Wednesday. It includes a proposal to borrow $1.3 billion against Pennsylvania’s annual share of the 1998 multistate settlement with tobacco companies, an approach rejected by their GOP counterparts in the House just last week. States typically borrow to prop up current spending only as a last resort.

Senators approved the main revenue bill in the package, 26-24, and it drew bipartisan support, including from Democratic Gov. Tom Wolf. It faces an uncertain future in the House, where majority Republicans are likely to resist calls for higher taxes to help close the budget deficit. Read more

July 25, 2017
The Inquirer
Pa. Senate could revisit budget Wednesday

HARRISBURG — Back to Plan A.

The full Senate is scheduled to return to the Capitol on Wednesday for a two-day stay, and could begin voting on bills to raise new revenue for the state’s cash-strapped coffers through a mix of borrowing and some new taxes.

That was the plan being discussed among budget negotiators before talks were upended last week, when the House’s top Republican tried — and failed — to push an alternative proposal at the eleventh hour.

If the Republican-controlled Senate goes through with votes this week, it would set the stage for a political showdown — not with the Democratic Gov. Wolf, but with Republican Party colleagues who hold a commanding majority in the House. Read more

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