Gov. Tom Wolf’s decision today to line-item veto the $30.3 billion state budget remains but a “step in the process” to a final resolution, said David Patti, president and CEO of the Pennsylvania Business Council.
“The business community and all Pennsylvanians still need certainty regarding the source of revenues to fund the budget at any level, and the actions that will be taken to begin limiting the immense cost of public pensions,” Patti said.
Other business leaders were in agreement, expressing general frustration by the continued delay. The fiscal year begin July 1.
In total, Wolf released about $23.4 billion in funds on an emergency basis. He called on the Republican-led General Assembly to return to Harrisburg to finish the job on a budget compromise.
Those emergency funds will help school districts, human service agencies and counties that have been waiting on state aid.
The governor limited funding to a half-year appropriation for basic education, state corrections and medical assistance. He rejected the legislature’s desired increases for their own funding, opting to flat fund from the 2014-15 budget. Community colleges, state system institutions and other higher education line items are also limited to flat funding.
There is no appropriations bill for state-related universities.
“In doing this, I’m expressing the outrage that all of us should feel about the garbage the Republican legislative leaders have tried to dump on us,” Wolf said in a brief statement.
He said the House Republican-led budget is not balanced and would leave the commonwealth with a structural deficit of more than $500 million this year and $2.3 billion in 2016-17.
“They almost did it, and then they didn’t,” Wolf said of a $30.8 billion Senate budget compromise, which he supported and which fell apart last week in the House.
The Senate then passed the House’s budget.
“This exercise in stupidity actually cuts education funding by $95 million compared to the draconian Corbett budgets,” Wolf said. “It does add a modest amount in basic education funding, but then it takes out over $300 million to be used for school construction.”
George Book Jr., president and CEO of the West Shore Chamber of Commerce, said businesses remain concerned about a hike in the state sales tax. Raising it or the personal income tax, maybe both, have been put forth in the current budget cycle.
Business leaders are expecting more of the same moving forward, especially with a budget address for 2016-17 slated for February.
“There is just general frustration. Why can’t we get this finished?” he asked.
Kevin Shivers, executive state director for the National Federation of Independent Business, puts the blame on the governor. The votes for a tax increase simply don’t exist, he said, urging Wolf to move on.
“This process is a messy process,” Shivers said. “But the product overall was the best (the legislature) could deliver. That’s what this process is all about.”
Warren Hudak Jr., owner of Cumberland County-based accounting firm Hudak & Co., called the latest budget developments “unfortunate.”
“The uncertainty is adding to struggling small business job creators and contributing to the drag on the (Pennsylvania) economy, largely a result of out of control health care costs and the retraction of the Marcellus Shale industry,” he said.
If lawmakers and the administration don’t get this budget right, Pennsylvania faces massive cuts to education and human services next year, Wolf said. And local taxes will only get higher to cover the costs.
“I get it that everyone is tired of this stalemate,” he said. “But we were almost there.”