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Legislators comment
on budget stalemate
By Duane Good, EDITOR


Saturday, Aug. 1 will mark one month without a budget in the Commonwealth of Pennsylvania.

Meetings began earlier this month in an effort to resolve the impasse that appears to pit Gov. Tom Wolf and his supporters on one side, and Republican legislative leaders and their supporters on the other.

As of the Sentinel’s July 27 press time, no resolution to the stalemate had been announced publicly. Pennsylvania’s Constitution requires passage of each new fiscal year’s budget by June 30.

As per a court decision, all state employees – including the governor, state Legislature and their staffs – are continuing to be paid, and state services deemed essential to public health, welfare and safety remain in operation as well.

However,  some entities that derive their operating budgets in part from state funding – such as school districts and county-level human service programs – are in danger of not receiving those funds in a timely fashion.

The story so far. Here is a recap of events leading up to the current (as of July 27) impasse, as well as the position taken by Sentinel-area state legislators on the issue.

• Wolf announced his 2015-16 Fiscal Year Budget proposal in March. The $33.8 billion plan called for $4.7 billion in additional state spending, which included an additional $400 million in basic education funding and $100 million more in special education funding.

• In addition, it proposed modernization – rather than privatization – of the state liquor store system to generate extra money; and a management re-shuffling of the state pension system, as well as refinancing some of the current pension liability, as opposed to more extensive reforms advocated by the GOP.

• Wolf also called for increases in both sales and personal taxes, as well as a 7.5 percent natural gas severance tax.

• The governor defended  the tax and spending hikes as necessary to repair what he called a ‘‘structural budget deficit’’ caused by spending cuts during the previous administration, and to provide multi-billion dollar school property tax relief.

• The proposal drew opposition from all Sentinel-area GOP legislators – state Reps. Sue Helm, Lynda Schlegel-Culver, Mike Tobash and Kurt Masser; and state Sens. John Gordner and David Argall – and support from the sole Democrat – State Sen. Rob Teplitz.

• In early June, the state House – including all of the Sentinel-area members –  unanimously rejected an amendment to House Bill 283 that would have authorized the tax increases requested in Wolf’s proposal.  The rejection meant the measure did not advance to the Senate.

• In late June, both the House and Senate passed a bill (Senate Bill 1) that would overhaul the existing pension funding system for both current and future state employees and public educators. Wolf vetoed the bill.

• Also in late June, both the House and Senate passed a bill (House Bill 1192) that reportedly retains or increases almost  two-third of the line-item appropriations the governor requested in his March proposal. Wolf vetoed the entire bill, saying it failed to address ‘‘the core issues’’ of school funding, property tax relief and the ‘‘structural’’ budget deficit.

According to voting breakdowns available online, all but one Sentinel-area legislator voted for the pension reform and state budget bills; Teplitz voted against both bills.

Willing to compromise – to a certain point. What needs to happen for Pennsylvania’s 2015-16 General Fund Budget to finally be put into place?

The Sentinel posed that question to state Reps. Sue Helm and Mike Tobash, both of whom supported the GOP-sponsored budget proposal vetoed by Gov. Tom Wolf; and state Sen. Rob Teplitz, who stood by Wolf’s veto.

Sue Helm. ‘‘We obviously want to move forward, and we are willing to talk, but we are sticking to our guns about not raising taxes,’’ said the 104th District House member. ‘‘In all of our (budget) discussions, there were no suggestions to raise taxes.’’

Helm said it’s her understanding that legislators on both sides of the aisle are on notice that a special session on the budget could be called at anytime, and that preparations for such  an occurrence are in progress.

According to Helm, a possible sticking point in any future negotiations is the proposed natural gas severance tax as a viable revenue source to help with school funding. She said she sees demand for natural gas falling in Pennsylvania and steps need to be taken to increase demand if the state expects to get the money it needs.

While the GOP is willing to meet and discuss with Wolf, the governor has to be willing to be part of the discussion and listen to any concerns, Helm said.  She said she remains puzzled by the governor’s rejection of a budget that had so many line-item expenditures he initially supported.

‘‘That hasn’t happened in a while,’’ Helm said.

Rob Teplitz. The state senator for the 15th District  said he believed the GOP majority ‘‘needs to move past public theater and engage in serious negotiating (on the budget).’’

‘‘It was clear (Republicans) wanted to push through a budget ... they passed a budget they knew he would veto; it was disingenuous of them to do that, and I’m glad he vetoed it,’’ Teplitz said last week.

Wolf is “willing to compromise’’ in certain areas but shouldn’t budge on his core goals, Teplitz said.

‘‘We don’t believe he should give up on his efforts  in areas like filling the structural deficits (in the budget) and enacting the severance tax. We hope the governor stays firm on his principals,’’ Teplitz said.

Teplitz continues to support Wolf’s position on modernizing the state liquor control system, as well as his ideas for getting pension funding under control.

The senator’s office confirmed that he has not accepted any pay since the start of the 2015-16 fiscal year July 1, and that he has introduced legislation that would suspend pay for the governor, lieutenant governor and all members of the House and Senate if a budget is not enacted by the start of each fiscal year.

The legislation was introduced Feb. 15 and remained in committee as of July 27, according to Sentinel research.

Mike Tobash. The 125th District representative said a legislative override of Wolf’s veto has been discussed; a two-thirds majority in both the House and Senate would be required.

“It would put us in a position where at least some things, like social services, could be funded,’’ he said last week.

“A rape crisis center in our district contacted me and said they would feel the pain soon if a budget wasn’t passed. That’s part of our effort to override – so hopefully things people need won’t come to a screeching halt,’’ he said.

As it now stands, school districts expecting state aid may not get it until late September, about a month after it’s scheduled, he said.

Tobash is hopeful that meetings between GOP leaders and the Governor’s Office will continue, and that all parties will review the budget line-by-line and compromise where needed.

‘‘We need to be discussing line-by-line what we can sustain; we need to be doing what many families have had to do with their own budgets,’’ he said. ‘‘It’s not a long-term solution to increase spending.’’

For his part, Tobash said that any new spending plan must resolve the state’s rising pension debt (he said the debt has increased by $1.8 billion since 2010 and now tops $50 billion); needs to consider whether the higher natural gas severance tax is sustainable long-term; and must ensure equitable state funding for all school districts, not just those in urban areas.

‘‘It’s very difficult for me to support sending more (state aid) to school districts that are failing academically, and not sending it to Upper Dauphin, Williams Valley and Tri-Valley,’’ he said.

GOP sends letter. Wolf’s budget veto was denounced in a July 6 letter signed by Gordner – the current Senate Majority Whip – and other  GOP House and Senate leaders.

‘‘Your indiscriminate veto ... puts politics above governing,’’  the letter said, noting that about two-thirds of the budget line items vetoes ‘‘provided the same or more state support than what you called for in your initial budget proposal.’’

In the letter, the leadership told Wolf that the GOP proposal ‘‘committed a record 10.6 billion to (public schools), the most in Commonwealth history’’ and increased Basic Education Fund by $100 million; Special Education by $20 million; Pre-K Counts by $25 million; and Head Start by $5 million. It also streamlined the process for reimbursing school districts for building project expenses.

The proposal called for $30.18 billion in expenditures – a 3.6 percent of $1 billion increase over last years and, in addition to the public school package, called for more more for colleges; made key investments in agriculture; increased funding for critical health line items; and allocated more funds to hire 350 new state troopers, the leadership said.

‘‘We will continue to work with you to come to an agreement on a General Fund Budget ... that meets Pennsylvania’s needs while being responsible to the taxpayer,’’ the leaders said.

Additional responses. Argall, also in a statement, after the budget was vetoed, said SB 1 would have saved taxpayers more than $10 billion while preserving the pension system for both current and future employees.

‘‘Like our counterparts in the private sector, our state government needs to make adjustments in our pension systems,’’ he said. ‘‘If we do not adjust, we can look to Detroit’s bankruptcy to see what happens when you constantly maintain the status quo. We should learn from (Detroit’s) example: that’s bad news for both public employees and the taxpayer.

Both Culver and Masser joined their names to a statement urging their constituents to call Wolf’s office directly, saying that he was responsible for the stalemate by refusing to endorse a budget that they said ‘‘meets the needs of this Commonwealth while being respectful of taxpayers, working and retired.

‘‘In the 2014-15 fiscal year, because the private sector created jobs, our state revenue collections were $400 million greater than expected,’’ according to the statement, which was endorsed by seven legislators. ‘‘This growth, provided by an expanding economy, coupled with the use of cash balances in state agencies, enabled the Legislature to produce a balanced budget without raising taxes.’’

In addition, Masser issued a statement saying that Wolf’s severance tax will not generate as much revenue as was projected.

‘‘Of his proposed $4.7 billion tax increase in 2015-16 (his taxes actually double for Pennsylvanians when fully implemented), just three cents of each dollar in new taxes would come from natural gas drillers (which would most likely result in higher home heating and electric bills for Pennsylvanians due to the tax being passed on),’’ Masser stated.

‘‘The governor claims enacting a severance tax is the only way to fairly fund our schools, but under his proposal, most of the tax revenue goes elsewhere, including funding to replace current impact fee distributions; additional state bureaucrats; “economic development” grants and making annual debt payments for massive borrowing to fund “alternative” energy competitors, including solar and wind energy (it would be like taxing Subway to fund McDonald’s),’’ he noted.

The proposed sales tax increase would have encompassed several items currently not taxed in Pennsylvania, Masser said.

Commissioners issue statement. The County Commissioners Association of Pennsylvania issued a statement July 24 called on state government to resolve its budget impasse as soon as possible.

‘‘County officials are bracing for the impact of delayed state payments to critical programs, including core human services such as mental health and intellectual disability services, children and youth agencies and drug and alcohol programs.

The statement included remarks by Dauphin County Commissioner George Hartwick III, who also chairs the association’s Human Services Committee.

Hartwick also said counties are calling for a three-year restoration of human-service related line items whose allocations were reduced by 10 percent in the 2012-13 fiscal year.

‘‘With caseloads consistently increasing, the Commonwealth must restore funding to these vital programs to bring them in line with historic funding levels,’’ Hartwick said.

CCAP also said it supports the retention of the natural gas impact fee that became available through Act 13 of 2012. Distribution of impact fees in all 67 counties have made it possible for counties to allocate funds for a variety of needs, the association said.

 




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