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Pa. lawmakers OK spending plan, but not how to pay for it

HARRISBURG - With hours to spare before the start of the new fiscal year, the Republican-controlled legislature gave its final sign-off to a $31.5 billion spending plan that Gov. Wolf said he could support.

HARRISBURG - With hours to spare before the start of the new fiscal year, the Republican-controlled legislature gave its final sign-off to a $31.5 billion spending plan that Gov. Wolf said he could support.

That was the good news for those aiming for an on-time budget.

The bad news for all sides is that there is no agreement on how to pay for the plan, which calls for increasing funding for public schools, early childhood and special education, and state colleges and universities.

Negotiations on that critical piece of the budget could stretch into next week, and Wolf reiterated in a statement Thursday night that while he supports the spending bill, he wouldn't sign it until "there is a sustainable revenue package to pay for it."

"I am pleased that working together we took this important step to move the commonwealth forward," Wolf said, adding that he would work with the legislature to resolve the revenue side of the budget ledger.

House Majority Leader Dave Reed (R., Indiana) said Thursday afternoon that negotiations on revenue are still "a work in progress."

"I suspect we'll be meeting throughout the afternoon and tonight on that as well, to hope to try to finalize a revenue package," he said.

The spending plan approved by the House on Thursday and the Senate earlier in the week calls for spending roughly 5 percent more than last fiscal year's $30 billion budget, with much of that increase driven by pensions, prisons, human services, and more aid for public schools.

Although the measure is nearly $2 billion less than what the Democratic governor had proposed spending when he unveiled his budget in February, it does make concessions to Wolf's unwavering demand that public education and opioid abuse prevention and treatment receive a significant funding boost.

The plan would spend an additional $200 million for K-12 classroom education; $30 million for early childhood education; $20 million for special education, and $39 million for state-system schools, community colleges, and the four state-related universities. It would also target $15 million at the opioid medication epidemic.

Wolf and Democrats and Republicans alike praised what they said was a willingness on both sides to compromise, which helped them avoid the stubborn stalemate that led to last year's historic impasse.

"This budget has a lot of positive things," said Rep. Mark Cohen (D., Phila.). "I commend both parties for negotiating an excellent step forward for all of Pennsylvania."

Added Senate Majority Leader Jake Corman (R., Centre) in a statement: "We have made excellent progress on establishing a complete state budget in a timely fashion."

But the optimism expressed by many inside the Capitol masks the difficulty ahead in agreeing on a tax package to fund the spending plan.

The House has backed four revenue-generating proposals that it says would raise around $1 billion to prop up spending. It would legalize online gambling and expand slot machines to airports and offtrack betting parlors; hike taxes on cigarettes and other tobacco products; make wine accessible at supermarkets and other venues, breaking the Liquor Control Board's control over its retail sale; and institute a tax-amnesty program.

But several senators have expressed doubts about the amount of money the House projects it will raise, and have picked at pieces of the gambling expansion and tobacco-tax proposals. The House has yet to pass legislation on raising tobacco taxes, saying only that it supports increasing by $1 the tax on a pack of cigarettes, which now is $1.60.

And some of the legislature's more conservative members have been pushing hard behind the scenes to revert to a budget that would not require any tax increases.

They also cast a hot spotlight during the House floor debate Thursday on the fact that the legislature was sending Wolf a budget without the corresponding legislation to pay for it.

"I feel like I've stepped into an episode of The Twilight Zone here," said Rep. Dan Truitt (R., Chester). "A budget has two parts: revenues and expenditures. We're about to vote on a bill to spend $31.6 billion, and we literally don't know where we're going to get the money."

He added: "The only rational vote is a 'no' vote."

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