With no tax hikes, Pa. Republicans aim for budget deadline

HARRISBURG - Republican legislative leaders emerged from closed-door budget talks Friday saying they were considering a state spending plan that would not raise any taxes - and that they believed they could approve by the Monday deadline.

Senate Majority Leader Dominic Pileggi (R., Delaware) said Republicans, who control the Senate and House, were looking at a budget blueprint that would spend about $29.1 billion to $29.4 billion.

He also said they were no longer discussing ways to raise new revenue through taxes. What that means, at least for now, is that proposals to raise the tax on cigarettes, or impose a tax on natural-gas extraction, appear to be off the table.

Some high-level Republicans said legislative leaders were looking, among other things, to use several hundred million dollars in one-time transfers into the general fund to help plug the budget gap.

"We've made very significant progress," Pileggi told reporters after meeting for more than two hours with top Republicans in both chambers. "We have some details to iron out, and many times, those details are the most difficult thing to iron out. But we had a very productive meeting today."

Though talks will continue Saturday, the House and Senate are not scheduled to meet again for voting sessions until Sunday. The new fiscal year begins Tuesday.

Pileggi's comments signified a shift from where many Republicans in the Senate, at least privately, had positioned themselves in recent weeks.

They had said they were open to new sources of revenue, including taxes or hikes. Among the proposals Republicans had discussed with the Corbett administration was a 10-cent increase in the state's cigarette tax, currently $1.60 per pack.

Another option was a new tax on the extraction of natural gas from the Marcellus Shale.

The extra money is needed because Gov. Corbett in February proposed a $29.4 billion budget that, among other things, would boost funding for public schools. But since that time, state revenue collections have fallen far short of expectations.

Many Republicans in the House, led by Majority Leader Mike Turzai (R., Allegheny), have said they did not like the idea of raising taxes. Corbett had said he would be willing to at least discuss raising new revenue through taxes, but only if the legislature delivered on two of his priorities: reining in the cost of rapidly rising public employee pensions, and privatizing the state-run liquor system.

The liquor issue, at least for now, appears to have been relegated to the sidelines. And House Republicans have been struggling for weeks to garner the necessary votes on a pension bill.

With little hope of raising taxes, legislative leaders are trying to figure out other ways to raise some money while spending less.

On Friday, Pileggi would not give any details on what they were considering.

He would say only, "We think we have a couple of ideas that might work."

The budget likely would contain few of the funding boosts Corbett wanted.

For instance, the governor had proposed an additional $400 million for public education. The majority of the new money, or $240 million, would be distributed under a new initiative called the "Ready to Learn" block grant, which the administration has said it wants to use to ensure that every child was reading and doing math at grade level by the third grade.