Wolf vetoes entire GOP budget, says 'math doesn't work'

Rep. Nick Kotick, D-Allegheny, listens as members debate the budget on the floor of the House of Representatives at the State Capitol in Harrisburg on Tuesday June 30, 2015. (AP Photo/Chris Knight)

HARRISBURG - Gov. Wolf vetoed the Republican-backed $30.1 billion budget in its entirety Tuesday night, a move that leaves Pennsylvania without a spending plan and sets the stage for a partial government shutdown.

A visibly frustrated Wolf told reporters shortly after 9 that the spending plan the Republican-controlled legislature sent him was riddled with "gimmicks," as well as "smoke and mirrors, and a lot of kicking the can down the road."

He said it failed to adequately fund public education or provide property-tax relief to homeowners, and contended it would worsen the state's finances.

"This isn't partisanship. This isn't ideology," the Democratic governor said. "The math doesn't work."

He added: "I'm truly sorry that we are at this place. I've worked hard over the last three months to work with Republicans to open lines of communication. . . . I've offered concessions. I've kept an open mind. And in return, what did I get? Republican leaders have simply said no."

Wolf called on legislative leaders from both parties to meet with him at 2 p.m. Wednesday in his office to resume negotiations. It was not clear whether Republicans would attend.

Longtime political observers said Wolf's decision to veto the budget in its entirety marked the first time in more than 40 years that a Pennsylvania governor had done so.

The veto means Pennsylvania starts the new fiscal year Wednesday in a partial government shutdown, and its spending authority will soon be sharply scaled back.

Administration officials and legislative aides have said the state can continue to operate without a budget - and without noticeable interruption to state services - for at least several weeks.

State workers will continue to receive paychecks and provide most services if they report to work, thanks to a court decision that grew out of the last major budget impasse in Pennsylvania in 2009, when Ed Rendell was governor.

And the state can pay most of its bills, drawing on revenue from the current fiscal year, at least for a few weeks after the deadline.

That picture changes dramatically if the stalemate is prolonged. Thousands of contractors as well as nonprofits and local governments that rely on state funding then would soon find the financial spigot turned off.

It had been clear for days that Wolf and the legislature were headed toward a showdown, as talks between the sides halted and Republicans began advancing their own budget.

Legislators spent most of Tuesday casting final votes on that budget, as well as a plan to privatize the state's wine and spirits stores and a separate measure aimed at controlling pension costs.

After more than four hours of debate, the Senate voted along strict partisan lines to approve the Republican-penned budget. The spending plan would not raise any taxes and would contain increases for public education, although significantly less than what Wolf wants.

Wolf's budget proposal calls for a nearly $1 billion hike for public schools, money that would be raised in part through a new tax on natural-gas drillers. His blueprint would also raise the state's personal-income and sales taxes to fund a major property-tax relief program for all school districts (though in Philadelphia, most of that money would be used to decrease the wage tax).

Republicans have criticized Wolf's plan as excessive, and have said that any fiscal plan for the state must include a fix for rising pension costs and a plan to get government out of the liquor business.

On pensions, the GOP has proposed moving all new state and public school employees into a 401(k)-style plan, unlike current employees, whose pensions are calculated with a formula that relies on their years of service and highest three years of pay.

On liquor, Republican lawmakers want to allow private retailers to sell wine and liquor - now the exclusive purview of the State Stores - and to lease the Liquor Control Board's lucrative wholesale operations. Their proposal would eventually shutter the State Stores.

Wolf has said he opposes both those plans.

During floor debate Tuesday, Republicans defended their spending plan, saying it responsibly funds programs without asking taxpayers to pony up more.

Senate President Pro Tempore Joe Scarnati (R., Jefferson) called it one of the "best-crafted budget documents we've seen in a long time."

He noted that Wolf has proposed $4 billion in higher state taxes, but said the GOP budget achieves many of the same goals, including boosting dollars for schools, without a new tax burden.

"He has to pass the red-face test of why he is for spending $4 billion more of your money," Scarnati said of Wolf.

On the Democratic side, there was frustration and some pointed criticisms for colleagues.

Sen. Vincent Hughes (D., Phila.) tore into Republicans' resistance to a new tax on natural-gas drillers. (Wolf has proposed a new - and higher - levy than the impact fee drillers currently pay.)

"All these folks crying crocodile tears for the energy industry . . . give me a break," said Hughes.

Sen. Rob Teplitz (D., Dauphin) called the GOP's spending plan a fake budget "based on tricks and ideology."

"It's not real because there isn't a person in this building who actually believes it will be enacted," said Teplitz. "We are going through the theatrics of passing a budget . . . only to be rejected by the governor, creating a couple of days of artificial chaos and crisis that will allow folks to [return home] to celebrate the July Fourth weekend."


acouloumbis@phillynews.com

717-787-5934@AngelasInk

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