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.

The House would be forced to either grit its teeth and pass a proposal that its top leader, Speaker Mike Turzai (R., Allegheny), has derided, or put off dealing with the issue until its summer break ends in September, prolonging the impasse over how to complete the state budget.

Jennifer Kocher, spokeswoman for Senate Republicans, said Tuesday that GOP leaders in her chamber have for months discussed "a menu of options" to pay for the nearly $32 billion spending plan that Wolf allowed to become law without his signature.

"We've now gotten to the point where we are going to order from that menu," she said, adding that Senate Majority Leader Jake Corman (R., Centre) has warned repeatedly that the decision will not be easy.

The legislature, with hours to spare before the July 1 start of the new fiscal year, passed a nearly $32 billion spending plan — but without a corresponding plan to pay for it.

At the time, Wolf said he was confident lawmakers would resolve the issue quickly. But nearly a month later, negotiators have not been able to agree.

Negotiators have discussed borrowing up to $1.5 billion to cover a gaping shortfall in last fiscal year's budget, using proceeds that flow annually into the state's tobacco settlement fund.

But they've wrangled over ways to raise an additional $700 million to cover a projected deficit in this year's spending blueprint.

Senate Republicans, along with Wolf and a number of Democrats, appear open to raising new dollars through increased or new taxes. Among other items, they have discussed reinstating a tax on natural gas consumers (about half the state's households use natural gas) and extending the state sales tax to basic cable service.

Democrats, along with some moderate Republicans, have also pushed for a new tax on natural gas drilling in the Marcellus Shale. Though Pennsylvania is the only major energy-producing state that doesn't tax extraction, GOP legislative leaders have historically been averse to it. (The state currently charges a per-well "impact fee.")

It is unclear whether any of those items will make the final cut this week, should the Senate decide to go forward with a vote on a revenue package.

But a number of House Republicans, led by Turzai, have been virulently opposed to any tax increases.

It was that opposition that drove Turzai to take a gamble last weekend: He called the chamber to the Capitol for a rare summer weekend session, pushing a no-tax plan that would have relied on straight borrowing and siphoning money from special funds that subsidize everything from farmland preservation to 911 call centers.

The gamble blew up within a matter of hours. House members went home without even taking up Turzai's plan in committee, let alone on the floor.

Turzai, a fiscal conservative from Western Pennsylvania, has since become something of a target.

On Tuesday, a few dozen demonstrators from the activist group Pittsburgh United, unions, and other groups gathered outside his district office near Pittsburgh, arguing that his no-tax plan would put the state in further debt and threaten social services, while protecting corporate interests.

"I am embarrassed and dismayed that my representative, Mike Turzai, is pretty much single-handedly responsible for this delay," said constituent Linda Bishop.

Emily McConville, of the Pittsburgh Post-Gazette, contributed to this article.