Corbett signs budget - 'Big 3' initiatives in doubt

HARRISBURG - Gov. Corbett signed the annual budget bill on time Sunday. And he revealed a financial rescue plan that he and others have pieced together for Philadelphia schools.

At the same time his chances of being able to successfully move the main items on his policy agenda appeared to be rapidly dimming.

With several hours to spare before the midnight deadline, the legislature sent Corbett a nearly $28.4 billion budget that boosts spending slightly without raising taxes. The governor signed it into law at a 10 p.m. news conference in the Capitol.

But two of his so-called Big Three initiatives, liquor privatization and transportation funding, appeared Sunday to be falling victim to a legislative impasse between the House and Senate. Legislators nixed the third item, public-employee pension reform.

Even the administration tacitly acknowledged it was losing hope of breaking what Senate President Joe Scarnati (R., Jefferson) called the legislative logjam.

Corbett tried to put a good face on the situation late Sunday night after the signing ceremony. "We've made progress," he told reporters. "These aren't easy things to do." He likened the legislature's two-year session, now at the six-month mark, to a football game - "It's the end of the first quarter. We've got three more quarters to go."

Still, there was ample evidence that some of his Republican teammates were not in the huddle. The Senate GOP leadership did not join him for the budget-signing ceremony. And earlier, the governor took the unusual step of imploring senators in a written statement to vote on the liquor bill by Sunday night.

"We are so close and we must not stop now," Corbett wrote. ". . . We must not lose this opportunity to deliver a reform the people of Pennsylvania want and deserve." But no vote was taken.

Asked whether the governor thought it was still possible to get lawmakers to act on his agenda, spokesman Kevin Harley said: "It's possible in the next few days, but at this point, we are focused on getting done what can be done now . . . I don't believe the Senate is going to move liquor privatization, and I don't think the House will move transportation [funding]."

"It's reality," Harley said. "But we do have a positive budget story to tell."

Part of that story includes the rescue package Corbett outlined Sunday for Philadelphia's financially beleaguered school district, though parts of that too, still await legislative approval.

The governor told The Inquirer he backed a plan that would help raise $140 million for the School District in the next fiscal year to help prevent the doomsday scenario district officials have said would unfold without financial assistance. The district faces a $304 million deficit and has sent layoff notices to 3,859 teachers and staff.

But the governor was banking on more than just an on-time budget this year. Facing reelection in 2014, and trying to turn the tide of sagging poll numbers, Corbett had pushed an aggressive agenda and urged legislators to address it together with the annual budget.

Liquor privatization was high on his priority list. The legislature has taken historic votes on the issue - a privatization measure passed the House in March, the farthest it has ever advanced. And the Senate gave preliminary approval to its own plan in the early morning hours Saturday, one that would make beer, wine, and hard liquor available in more outlets and that would eventually close many, if not all, State Stores.

The Senate still has time to give that plan final approval. But Republicans, who hold the majority in the chamber, refuse to do so without a commitment from their House counterparts to report out a transportation funding bill, another Corbett priority.

House GOP leaders have been unable to do so because the transportation bill involves an increase in a wholesale fuel tax, plus other fees and taxes - anathema to that chamber's more conservative members. That means Democratic votes are needed, and the Democrats in the House have refused to provide them, contending the bill does not contain enough money, particularly for mass transit.

Sen. Robert Tomlinson (R., Bucks) said he was still hopeful the fate of the transportation bill could be separated from that of liquor privatization.

"In my opinion, transportation is the most important bill we have," Tomlinson said Sunday. "In the southeast, it's an economic issue. We can't get one more car on those roads. It should stand on its own."

But Rep. Stan Saylor (R., York), House majority whip, said transportation would be put off until fall, when the legislature returns from its summer break. He said a cooling-off period was necessary.

"We're going to move it to the fall [because] the Democrats are not serious," he said. "They want a billion more in spending. Well, that's taxes. And I haven't seen a Democrat introduce a billion-dollar tax bill."

Corbett's third priority, reining in the rapidly rising cost of public employee pensions, has not been discussed seriously in days in the legislature, and is unlikely to be taken up until the fall.

With Corbett's agenda stalled, the legislature focused Sunday on passing a budget and beginning to move some of its related bills, including the welfare and fiscal code. But they still have work to do, and the House will return Monday, and possibly Tuesday, to complete it.

The code bills that still need approval are mostly technical, but have taken on added importance this year, as they contain keys to several elements of the Philadelphia schools rescue plan that Corbett is pushing.

One of the bills, the welfare code, also contains language to expand Medicaid to offer health care coverage to as many as 600,000 lower-income Pennsylvanians. Corbett had initially opposed the expansion, which is available to states under the federal health law known as Obamacare, but the governor signaled over the weekend that he would consider any language the legislature sent him.

The Senate on Sunday passed a welfare code with the Medicaid expansion provision in it. How that bill will fare in the House, though, remains a big question: A group of 33 mostly conservative House Republicans wrote to colleagues last week, saying they opposed it, and it was not immediately clear whether Republican leaders would try to strip Medicaid expansion out of the welfare-code bill when they take it up Monday.

Here are key elements of the spending plan signed by Gov. Corbett for the fiscal year that starts July 1:

The Big Picture

Taxes

Pensions

Education

Health care and social services

Public safety

SOURCES: Associated Press and Pennsylvania Senate Republicans.