Following House vote, Senate expected to take up state budget on Monday

The state Senate will use the weekend to digest a Republican-led House revenue plan that is designed to resolve a long-running budget dispute without raising taxes.

Jenn Kocher, a spokeswoman for Senate Republicans, said the GOP will caucus Monday when the Senate returns to session. The General Assembly has been trying to wrap up a $32 billion budget since June.

“The House revenue plan has many technical components developed over six weeks,” she said. “We will be taking a few days to digest it and discuss it with members.”

But before that happens, the state’s general fund could run out of money, which could delay nearly $900 million in scheduled payments, according to state Treasurer Joe Torsella.

Torsella warned of a zero balance by Friday if there was no resolution on the budget, which may also trigger a bond rating downgrade from credit-rating agencies.

The House Republican budget, which passed by a 103-91 vote on Wednesday, would cover Pennsylvania’s $2.2 billion budget hole through a variety of measures that do not involve raising taxes.

The plan — developed largely by rank-and-file Republicans, including several midstate lawmakers — relies on $630 million in special fund transfers from state funds with excess or dormant monies.

The budget bill also seeks a $1 billion lump-sum payment by selling rights to a portion of the state’s tobacco settlement fund, which currently receives about $350 million per year. 

In addition, House Republicans want to move about $400 million in so-called lapsed funds, or funds not spent in prior budgets, from various agencies. And they are seeking $225 million from an expansion of casino gambling.

Other smaller transfers also are part of the budget plan, including $20 million from legislative reserve accounts and $50 million from the Pennsylvania Liquor Control Board.

House Democrats called the Republican budget plan “fiscal gimmickry.”

“I can only deduce that House Republicans have no qualms about kicking fiscal responsibility way down the road,” said Rep. Jake Wheatley (D-Allegheny), Democratic chairman of the House Finance Committee. “Everything we know that put Pennsylvania in such a deep fiscal hole — excessive borrowing, raiding funds from important programs and risky revenue gambits — is front and center in the late and latest House Republican plan.”

Democrats have been pushing for a severance tax on natural-gas drilling, an increase in the gross receipts tax on utility bills, eliminating the sales and use tax exemption for online purchases, and raising the state’s personal income tax.

The current budget became law without Gov. Tom Wolf’s signature in July, despite the lack of a revenue package to pay for it.

The Senate then passed a revenue bill that included a severance tax, heavy borrowing against future revenue, increased utility taxes and an expanded gambling.

But the House GOP opposed the Senate plan.

“For weeks since the Senate acted, Governor Wolf has urged the House Republican majority to return to Harrisburg and take serious steps to complete and balance the budget. Yesterday, the House passed a plan that fails to address the long-term deficit and faces an uncertain future in the Senate,” Wolf spokesman J.J. Abbott said Thursday.

“The governor took action last month to protect funding for local school districts because our schools and kids should not bear the consequences of the House’s fiscally irresponsible inaction,” Abbott added.

“As Governor Wolf has said, a failure to complete the budget in a timely fashion and cover the $2.3 billion deficit jeopardizes funding across government,” he continued.

“Governor Wolf will have to manage the budget if the General Assembly does not complete the budget. More details will be available tomorrow,” Abbott said.

Jason Scott
Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin and Cumberland counties. Have a tip or question for him? Email him at jscott@cpbj.com.

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