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Budget remains king in General AssemblyBeyond 2012-13 fiscal blueprint, few issues likely to move over summer session

By - Last modified: May 11, 2012 at 9:52 AM

Expect almost nonstop budget talk until the close of the current fiscal year at the end of June, said Democratic and Republican spokesmen in the state House and Senate.

As is customary when state lawmakers return from time off for Easter and the primary elections, proposals for next year’s budget blueprint should dominate the majority of session days, leaving little time for other legislative initiatives.

“The budget is going to take the lion’s share of oxygen over the next couple of months,” said Erik Arneson, a spokesman for Senate Republicans.

An amendment is brewing in the House on a bill to privatize the state liquor stores, House Republican spokesman Steve Miskin said.

Senate leadership said advancing a solution to repair the state’s unemployment compensation system, which is about $4 billion in debt to the federal government, is a top priority.

The House already has passed a bill intended to close the so-called Delaware loophole and reduce corporate net income taxes, but Gov. Tom Corbett reportedly wants to wait until next year’s budget negotiations to address that issue.

A bill that would allow the state to lease transportation assets to private firms through public-private partnerships, or P3s, also has cleared the House and could move this summer, party spokesmen said.

P3s could help the commonwealth expedite the process of rebuilding its crumbling transportation infrastructure.

However, a much larger legislative approach that considers taxes and fees to fund long-term transportation needs remains on the back burner as lawmakers wait to hear from the governor on what he will and will not support.

“The prospect of a transportation package in May or June is very dim,” Arneson said. “As much as we would like to and we recognize the need to do something with transportation funding, it just seems unlikely.”

A 2010 study by the State Transportation Advisory Committee pegged the annual unmet need at $3.5 billion.

In recent months, lawmakers on both sides of the aisle have offered possible solutions to address the funding shortfall. Many of the proposals have paralleled recommendations from Corbett’s Transportation Funding Advisory Commission.

In August, the commission drew up proposals that would add about $2.5 billion for infrastructure over a five-year period. The commission’s plan included uncapping the gas and oil company franchise tax, increasing fees, moving the state police budget over to the general fund and modernization programs at the state Department of Transportation.

“Gas prices are at a very high level. It would be challenging for anyone to explain why it makes sense to raise the gas tax (right now),” Arneson said, arguing that the governor’s no-tax pledge is not the only impediment.

Bill Patton, a spokesman for House Democrats, called the governor’s refusal to engage on the transportation funding issue “frustrating.”

“On rare occasions, he says, ‘I need to hear what the legislators want to do.’ He hasn’t invited us to have direct conversations,” Patton said. “I really hope that something tragic does not happen, but the longer we wait and do nothing, the more likely a bridge collapse or failure is to happen.”

The governor’s office did not return several calls and emails seeking comment for this story.

With passing an on-time budget that maintains current tax levels at the top of the agenda, political analysts like Franklin & Marshall College’s Terry Madonna agree there will be little time for anything else this summer.

“I can’t see anything of consequence that they do other than the budget and budget-related matters,” said Madonna, director of the college’s Center for Politics and Public Affairs.

When it comes to the 2012-13 budget negotiations, the big battle likely will be over what gets restored from the governor’s $27.1 billion proposal.

General fund tax collections came in at nearly $99 million, or 3 percent more, than expected in April, according to the state Department of Revenue. Tax collections are down about $288 million, or 1.2 percent, for the year to date.

Corbett had expected a 2011-12 budget shortfall of $719 million when he gave his budget address.

The state’s Independent Fiscal Office has projected the state would collect $419 million more than Corbett expected. About $400 million more in revenue is expected in 2012-13, the IFO said.

The rosier revenue picture has Republicans and Democrats talking about restoring public education and social service cuts in the governor’s proposed budget.

Senate Republicans have introduced a $27.7 billion budget proposal.

The Corbett proposal called for slashing state-related university budgets by 30 percent, while state system schools would be hit with a 20 percent reduction in their budgets.

Funding for K-12 remains largely level under a proposed block grant approach that would give school boards more control over how they spend state aid.

Social services would be cut about 20 percent under the governor’s proposal.

“Everything is going to depend on sustainability,” Miskin said. “We are not going to pass a budget that increases spending more than the rate of inflation.”

Lifting mandates on municipalities and school districts is a priority, he added.

“The overwhelming focus with the good revenue news has been and will continue to be restoration,” Arneson said, also citing funding for agricultural programs along with education and county-level social services. “Nobody is advocating new programs. It’s all about restoring cuts.”

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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