Pa. legislature deciding how much to spend - later how to pay for it

HARRISBURG – With the deadline to pass a state budget fast approaching, legislators began voting on a $31.9 billion spending plan late Thursday — though there was no agreement on how to pay for it.

The Senate Appropriations Committee approved the spending bill shortly after 10 p.m. with little debate, positioning it for floor votes in both legislative chambers by day's end Friday. The new fiscal year begins Saturday.

Steve Miskin, spokesman for House Majority Leader Dave Reed (R., Indiana), said early Thursday evening that House negotiators also had agreed to the plan.

"Obviously, the final word is when it gets voted," he said, but added, "I expect it to pass overwhelmingly."

And though Thursday night's vote was a significant step in getting a financial blueprint for the state, the budget appears to be heading into overtime again.

For the Republican-controlled legislature, time is running out to decide how to pay for the spending plan before the start of the 2017-18 fiscal year. The Senate has said it will break after Friday for the weekend. The House has not announced its plans. But it appears unlikely that the legislature will be able to complete all components of the budget before the July Fourth holiday.

Senators are aiming to finish work next week on a revenue package, said Jennifer Kocher, spokeswoman for Senate Majority Leader Jake Corman (R., Centre). She said negotiators had not yet reached agreement on which proposals to approve.

The $31.9 billion spending plan would increase funding for K-12 education by $100 million – the amount Wolf proposed earlier this year.

It would also increase special education by $25 million, and give an additional $30 million for early childhood education.

"I'm pleased with what the product that will be leaving the Senate tomorrow looks like," said Minority Leader Jay Costa (D., Allegheny).

Costa said the spending plan has bipartisan support and that he plans to vote for it.

He defended the fact that the legislature is moving to approve a spending bill without an agreement on how to pay for it.

"It's not irresponsible," he said, noting that the state's revenue from the sales, personal income, and corporate taxes alone will carry the lion's share of the cost.

He added: "It's making certain that we pass the budget on time, to be able to allow government to continue as we figure the revenue side of the equation. Ideally, I'd like to have it all done by now, but that hasn't happened."

Despite Thursday's rush to position the spending plan for on-time passage, there were moments of down time — and merriment, apparently.

As the two chambers broke late afternoon in advance of Thursday night's Senate committee meeting, Lt. Gov. Mike Stack, a Democrat from Philadelphia, invited all senators to come to his office for an office party.

"He's always done that as lieutenant governor," said spokesman J.P. Kurish. "He has people together to decompress."

Kurish said there was food, and was unclear whether Stack's office paid for it. And there was beer, among other beverages, which Kurish said he paid for and which he said very few people drank.

He said the showing was "bipartisan."

Thursday's push to get a spending plan completed without a deal on revenue sets the stage for a repeat of last year's budget scenario.

In 2016, the legislature sent Wolf a spending bill hours before the start of the new fiscal year, but without an agreement on how to pay for it.

Wolf did not sign or veto it. He let it lapse into law without his signature, saying he had faith that legislators would quickly deliver the payment package.

Days later, the legislature approved the bills to pay for the budget.

This year, there has been a lot of talk, but little action, on ways to raise money to close the roughly $1.5 billion shortfall in the current budget.

Though there have been lengthy discussions about expanding gambling, the talks have become bogged down in disagreement over how much expansion to allow. Specifically, lawmakers in the House and Senate are bickering over whether to legalize up to 40,000 video gaming terminals (VGTs), slots-like machines, in bars, restaurants, and other establishments across the state with a liquor license.

Senate Republicans have also floated the idea of borrowing against money that flows annually into a fund set up after the 1998 landmark agreement between tobacco companies and the states.

Wolf has said he would be open to borrowing to cover what he called the state's "one-time" revenue shortfall. House Republicans, however, have studiously avoided taking a position on whether they could support such a plan.

Borrowing was not part of the original plan. When Wolf unveiled his budget proposal in February, he recommended balancing the state's books through a mix of new taxes — including a new tax on natural gas extraction — and savings through consolidating various state departments.

Republican leaders have rejected the idea of a new tax on drilling in the Marcellus Shale. Currently, drillers pay an impact fee.

But that didn't stop a group of Republican lawmakers from the Philadelphia suburbs from dropping a bill Thursday to do just that. The legislation would create a variable tax rate based on the average Pennsylvania "hub" price for natural gas in the prior year. The bill would also give natural gas producers tax credits for their impact fee payments.

In an interview, Rep. Nick Miccarelli (R., Delaware) said he believes if the bill were to get to the floor of the House, it would have enough votes to pass.

That is a big if, given the prevailing anti-tax sentiment of House GOP leaders, who decide what bills are put up for votes.