Pa. budget on time? Not likely, Wolf says

HARRISBURG - Gov. Wolf said Tuesday that he doubts the state will enact the next fiscal year's budget by the June 30 deadline, a prediction that signaled a protracted and partisan fight building in the Capitol.

The Democratic governor, whose $29.9 billion spending plan has already sparked heated debate in the Republican-led legislature that must approve a budget, said that he would like to be hopeful, but that history had convinced him otherwise.

"I'm planning on spending the summer here," Wolf quipped in an interview with The Inquirer, adding, "And the fall, and the winter."

His comments were an unusually stark assessment for a first-term governor facing a budget deadline nearly three months away. They also stirred a quick backlash.

"It tells me he just wants to start a political partisan fight," said Steve Miskin, a spokesman for House Republicans. "That is Barack Obama 101. That is Washington, D.C. 101. And that is not something that we want here in Pennsylvania."

Jennifer Kocher, spokeswoman for the Senate Republicans, put it this way: "It is somewhat par for the course of the attitude we've been getting from the administration - they don't appear to want to work with the Senate Republicans, but rather just make grand announcements and move forward from there."

Wolf's predecessor, Tom Corbett, signed a budget on time in each of his first three years, but last summer let the deadline pass, in part because he was frustrated by the legislature's inability to address one of his priorities - the rising cost of state pensions. Ignoring the June 30 deadline was more common during Ed Rendell's tenure, when Wolf served as revenue secretary.

In 2009, the state endured a 101-day budget delay.

Unlike some public entities, the commonwealth is not mandated to have a spending plan in place by July 1. But a protracted budget stalemate can affect the state's ability to pay its bills or workers. It also can intensify the partisanship among lawmakers and officials.

In the interview Tuesday, Wolf said he did not yet have a contingency plan to keep the government running if there was no budget agreement July 1. But, he said, "there will be plans in place in case the budget isn't done on time."

Longtime observers of the Harrisburg scene have argued that this is not a usual budget year: Wolf has proposed a bold and controversial spending plan that seeks to revamp how - and how much - Pennsylvania residents will pay in taxes.

His plan would raise the state's sales and personal income taxes to pay for sweeping property-tax cuts in school districts. It would also boost education funding nearly $1 billion.

Wolf's budget would increase the state's personal income tax from 3.07 percent to 3.7 percent - a 20 percent increase that would raise about $2.3 billion - and the sales tax from 6 percent to 6.6 percent - a 10 percent increase - while extending it to more goods and services, which would raise $1.5 billion. (Philadelphia's 8 percent sales tax would remain unchanged.)

Food, clothing, and prescription drugs would remain exempt, but other goods would not, including newspapers, candy, and personal hygiene products.

Much of the money raised from the tax increases would go toward funding Wolf's property tax relief plan, worth $3.8 billion, for all 500 school districts in Pennsylvania, except Philadelphia, where it primarily would target the wage tax.

Wolf's budget would also impose a 5 percent tax on extraction of natural gas from the Marcellus Shale, plus a per-cubic-foot fee on gas, which he says together would raise roughly $1 billion for public education.

As for skyrocketing public employee pension payments - a priority this year for Senate Republicans - Wolf has proposed $3 billion in borrowing to refinance the public school employee pension obligations, and using proceeds from modernizing the State Stores to pay for it.

Republicans, who hold majorities in the Senate and the House, have rejected that idea and much of the rest of his proposal. They contend it amounts to a massive tax increase that would hurt the middle class.

Wolf on Tuesday said he was open to new ideas - he said he would "relish" them - but appeared resolute that the state needs a jolt in its policy-making to be successful.

He also said he was not fazed by the prospect of a late budget to get a plan that he believes will make Pennsylvania stronger.

"I can't see how anybody here, in either party, in either house, can say, 'I really don't want jobs that pay. Nah, I don't want schools that teach. No, I don't want government that works,' " Wolf said. "We need all three of those. Those aren't really electives."