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Pa. House OKs budget; battle looms on how to pay for it

HARRISBURG - The House on Tuesday overwhelmingly approved a $31.5 billion budget with heavy support from Republicans and Democrats, but a stubborn behind-the-scenes fight remains over how to pay for it.

HARRISBURG - The House on Tuesday overwhelmingly approved a $31.5 billion budget with heavy support from Republicans and Democrats, but a stubborn behind-the-scenes fight remains over how to pay for it.

The plan passed by the GOP-dominated House in a 132-68 vote would spend about 5 percent more than this year's $30 billion budget, and send an additional $200 million for K-12 public education as well as more money for preschool and special education.

Both parties hailed it as an example of the bipartisan spirit that has permeated budget talks this year, unlike last, when an impasse dragged on for nine months. But they have yet to move legislation that details a key tax they are seeking to increase on tobacco - or even whether the money-generating proposals they have approved would raise enough dollars to support the budget.

For his part, Gov. Wolf said Tuesday that he does not believe the House's plan, which would rely on new money from online gambling, among other proposals, raises enough funds.

"I haven't agreed to this, and as far as I can tell there's still some things that need to be worked out," Wolf told KQV-AM in Pittsburgh.

Rep. Bill Adolph (R., Delaware), who chairs the Appropriations Committee, has said the House would raise about $1 billion from legalizing online gambling, breaking the state's monopoly on wine sales, increasing tobacco taxes, and launching a tax amnesty program.

The biggest chunk would come from online gambling and a tobacco tax increase. The online-gambling bill, which the House approved Tuesday and now heads to the Senate, would authorize casinos to set up websites offering slot machine and table games, and permit slots at airports and at off-tracking betting sites. It is expected to raise about $267 million.

The House has been circumspect on its plan for tobacco taxes, but its leaders have said an increase could raise just shy of $500 million. In his budget proposal earlier this year, Wolf called for increasing by $1 the tax on a pack of cigarettes, which now is $1.60, while also implementing taxes on smokeless tobacco, cigars, and e-cigarettes. Adolph has said that the House was considering a $1-per-pack increase as well.

But the Republican-controlled Senate has yet to endorse the budget the House has approved, or to sign off on key pieces of the House's plans for raising new dollars. Senate Majority Leader Jake Corman (R., Centre) said this week that he had a problem with the state penalizing smokers when it is looking for more money.

As for the Wolf administration, it does not believe the House numbers go far enough to close the state's projected $1.8 billion deficit. It is pushing behind closed doors for restoring the gross receipts tax on natural gas sales, according to budget negotiators, a move that could raise between $380 million to $500 million. Natural gas is Pennsylvania's most prevalent home heating fuel, used in more than half of the state's five million households.

House Republican leaders have been cool to that idea, with Majority Leader Dave Reed (R., Indiana) saying Tuesday that his caucus had "significant concerns."

Despite those lingering differences, House leaders said Tuesday that the chamber's vote positioned the state to enact an on-time budget this year. The deadline to pass a budget is Thursday.

Rep. Joe Markosek of Allegheny County, the Appropriations Committee's ranking Democrat, said the budget "represents a return of a more positive level of political cooperation."

He added: "We were able to negotiate in a very civil and productive way with our colleagues on the other side of the aisle because we're all in this together on a very, very good budget this year - not quite what everybody wants, but certainly a pretty good budget."

The chamber's conservative Republicans disagreed.

Rep. Daryl Metcalfe (R., Butler) said spending $1.5 billion more than last year would be too high of an increase.

"This proposal is setting us up for a major economic accident," he said. "But it won't be by accident. It will be by the willful choice of the General Assembly."

Rep. Rick Saccone (R., Allegheny) put it this way: "When you hear a politician say, 'We've got to get something done,' grab your wallet, Mr. Taxpayer, and run."