Pa. lawmakers: Much accomplished, much left undone

HARRISBURG - The legislature began its summer break with this much accomplished: a $28.4 billion budget, with no new taxes, signed on time by Gov. Corbett.

But the most-talked-about items on the agendas of both the General Assembly and the governor - liquor privatization, transportation funding, pension costs - were cast aside until at least September, amid intraparty and inter-chamber bickering.

Stranded, too, was a companion bill that would authorize state spending and free $45 million for Philadelphia schools, stymied by a late push to legalize so-called payday loans. So was a bipartisan agreement to expand Medicaid.

Though some of last week's budget showdown concerned seemingly tiny changes in highly technical bills, the results stand to affect many Pennsylvanians: nearly 600,000 uninsured who could have been covered by a Medicaid expansion; 200,000 students in Philadelphia's cash-strapped school district; thousands of SEPTA riders, for whom fares went up last week and who could face service cuts or more fare increases, since the legislature failed to approve a transportation funding bill.

As late as Friday afternoon it remained unclear when the House might return for a final vote on the fiscal code - the bill that, among other things, calls for authorizing $45 million for Philadelphia schools, a big slice of the rescue package that city, state, and federal officials have devised to help the district overcome a $304 million deficit.

"No decision has been made," House GOP spokesman Steve Miskin said Friday. He said lawyers were conferring with administration officials to determine the impact of not having the fiscal code enacted before Sept. 23. That is when legislators are to return from their break.

Corbett on Wednesday urged the House and Senate to "resolve their differences" and quickly approve the bill, warning that not doing so could have "significant implications" for spending and revenue. Budget Secretary Charles Zogby said inaction would tie up $245 million in spending.

There was also concern that the state-related universities, Lincoln, Pennsylvania State, Pittsburgh, and Temple, could suffer. With no fiscal code, money set aside for them could be "repurposed," said Bill Patton, a spokesman for House Democrats.

The House has a nonvoting session Monday to allow Speaker Sam Smith (R., Jefferson) to sign the Welfare Code bill, which would authorize funds for an array of social services - minus Medicaid expansion.

That expansion had briefly been approved by a bipartisan 40-10 Senate vote. In a signal that the governor might go along, Majority Leader Dominic Pileggi (R., Delaware) said Corbett aides were in on the drafting.

But the House stripped Medicaid expansion out.

For the summer, at least, the expansion met its death Wednesday in a packed meeting room off the Senate floor. There, a committee of the chamber's leaders left standing the House's action - while slicing out the language on payday lending that the House had inserted into the fiscal code.

First came Democrats' impassioned pleas on Medicaid, asking colleagues to allow hundreds of thousands of working poor to get health coverage. And not all the pleas were from Democrats. Sen. Pat Vance (R., Cumberland), chairman of the Public Health and Welfare Committee, said on the floor, "We have lost an opportunity for the people of the commonwealth to get care, for no logical reason."

If none of the big-ticket items - liquor privatization, transportation funding, pension reform - are approved this fall, Corbett and lawmakers will face 2014 reelection races with little to show voters, said political analyst G. Terry Madonna of Franklin and Marshall College.

"Somehow, one of these three issues has to get done to salvage anything this year," he said Friday. "So the budget was on time. Voters don't care unless it affects them. There will be enormous pressure on Republicans to deliver."

Voters like accountability, too, and some critics said the House hurt itself on that score last week.

The item that derailed the 57-page fiscal code was six lines, added late in the process, that would allow lenders who offer "payday" short-term, high-interest loans to operate in the state. Those lenders had withdrawn after a 2010 court decision capping interest rates.

But who did the inserting? Pileggi, sounding dismayed, said he learned of it when Senate lawyers reviewed the bill last week after it came back from the House. Senate leaders struck it out; that is why the bill's final version still needs House approval.

Eric J. Epstein, who founded the watchdog group Rock the Capital after the legislative pay-raise debacle of 2005, said the late insertion belied public promises of transparency. "They're playing a game of reform charades," he said. Epstein said it was especially disheartening that no one took responsibility for the words.

Miskin, spokesman for the House GOP majority, repeated Friday that he did not know who added the language to the bill. "A lot of different people have been drafting it," he said. "The House and Senate have been going back and forth on it for years."

One of the lobbyists for payday lenders is John O'Connell. As The Inquirer reported in February, his lobbying firm helped host a $5,000-a-person GOP campaign fund-raiser that month honoring Speaker Smith at the Pebble Beach golf resort in California. During one of the House's final days of work last week, O'Connell was seen leaving Smith's office.

Miskin said that Smith and O'Connell were old friends and that it would not be O'Connell's style to pressure the speaker at that late hour. Miskin called the question of who inserted the language "much ado about nothing."