Meadville Tribune

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June 30, 2014

Pennsylvania House approves Republicans' $29.1B budget

HARRISBURG — The Legislature voted late Monday to put a looming, $1.5 billion shortfall in its rearview mirror, with a deal to pass a $29.1 billion budget that increases state spending by 1.8 percent but doesn’t hike taxes.

Republican Gov. Tom Corbett issued a statement after the House vote, saying he does not intend to immediately sign the bill, while he still pushes for a pension reform vote.

“The budget I received tonight makes significant investments in our common priorities of education, jobs and human services. It does not address all the difficult choices that still need to be made," Corbett said in a statement released just before 11 p.m. Monday.

“I will continue to work with the legislature toward meaningful pension reform. I am withholding signing the budget passed by the General Assembly while I deliberate its impact on the people of Pennsylvania,” Corbett said in the statement.

The governor's resistance came after a fiercely debated bill passed both chambers without any Democratic support.

Division remains over how that $1.5 billion gap is reconciled. Republicans say the spending plan shows how government can live within its means, while Democrats say it leans heavily on gimmicks and shortchanges schools.

Rep. Mark Longietti, D-Mercer County, dismissed the package as a “smoke and mirrors budget crafted out of paper clips.”

He said the budget’s over-optimistic assumptions suggest the state faces a dire financial crisis by the end of the year.

Republicans, who control both houses of the General Assembly, defended the plan as the best option available.

“Considering how bad our economic circumstances are, it’s a pretty good budget,” said Republican Rep. Brad Roae of Crawford County.

The Senate voted Monday afternoon to pass the spending plan, followed by a House vote later in the evening, just as the final minutes of the fiscal year were ticking away.

The 108-95 vote in the House and the 26-24 Senate tally followed sharply partisan debates in both chambers that echoed the state’s gubernatorial campaign.

The budget closes a gap that was created as 2013-14 tax revenue repeatedly missed projections. At one time the shortfall was estimated to be as much as $1.5 billion.

The budget includes one-time shifts of $100 million from each of two business loan funds to the school employees’ pension fund. It also transfers $225 million from two investment reserves into the pension fund.

To balance the books, Republicans also boosted how much the state expects to receive in tax collections in the coming year. The budget increases revenue by $224 million.

The budget also indicates the government will collect $95 million more for allowing gas companies to expand their activities in state forests — which is $20 million more than Gov. Tom Corbett said he expected when he unveiled the idea in February.

Sen. John Wozniak, D-Cambria County, called the timing of the budget maneuvers suspicious considering Corbett, all of the state House and one-third of the Senate are up for re-election. Wozniak said this isn’t a “live within your means” budget but a “spend-and-pretend” one.

The budget has two charms, Wozniak said. One, it means incumbents don’t have to vote for a tax increase before the fall election. And, with polls showing Corbett lagging his Democratic challenger, Tom Wolf, the spending plan could be designed to saddle a new governor with a crisis when he comes into office.

“That’s my opinion,” Wozniak said.

As Democrats lambasted Republicans for shifting money from loan funds, Republicans defended the strategy as the same one employed by any homeowner or merchant trying to balance a checkbook.

“If you’re running a small business and you have funds not being used, before you go to your customers, or the taxpayers, you would spend the money you have on hand,” said Rep. Dick Stevenson, R-Mercer County.

Rep. Lynda Schlegel Culver, R-Northumberland County, said the alternative is raising taxes.

“I don’t think the folks back home can afford that,” she said.

Longietti said that while the new budget provides more than last year, when it comes to classroom funding, schools are still getting less than they did in the pre-federal stimulus year of 2008.

Rep. Fred Keller, R-Union County, said the objections raised by Democrats amount to little more than “grandstanding.”

Republican Rep. Greg Lucas of Crawford County said he’d love to vote for a budget that spends more money on schools, social services and job creation.

“It’s the only budget we got,” he said. “Without raising taxes or making an excise tax on Marcellus gas drilling, we’re where we’re at.”

John Finnerty reports from the CNHI Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by Community Newspaper Holdings Inc. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

The following is information on increased state spending by area school district in the 2014-15 budget along with the percentage increase of the change.

Conneaut

Increase: $396,007, 2.4 percent

Crawford Central

Increase: $875,055, 3.8 percent

PENNCREST

Increase: $801,578, 3 percent

General McLane

Increase: $509,319, 3.5 percent

Union City

Increase: $309,387, 2.6 percent

Commodore Perry

Increase: $158,711, 3 percent

Jamestown

Increase: $126,224, 2.9 percent

Lakeview

Increase: $292,400, 3.2 percent

Titusville

Increase: $489,667, 2.8 percent

Source: House Appropriations Committee

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