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Another deadline looms as Pa. House adjourns without budget-balancing plan

The Capitol has become a pressure cooker over the state budget.

Gov. Wolf has warned of steep budget cuts at the end of the week if the Pennsylvania House does not act to resolve the budget impasse.
Gov. Wolf has warned of steep budget cuts at the end of the week if the Pennsylvania House does not act to resolve the budget impasse.Read moreAP Photo/Matt Rourke

HARRISBURG — The pressure is on.

By the end of this week, Gov. Wolf has said, he will need to make deep cuts to the $32 billion budget the GOP-controlled legislature passed in June unless the House moves on a proposal to fund it.

Though the House returned to session this week after a six-week summer hiatus, Republicans who hold the majority in that chamber remain divided over a revenue plan. On Tuesday, leaders adjourned without a vote on one approach to close the $2.2 billion deficit: transferring money from special-purpose funds.

In the meantime, a credit rating agency has warned of a looming downgrade.  State Treasurer Joe Torsella and Auditor General Eugene DePasquale said Tuesday that they would be "disinclined" to either extend a short-term loan or sign off on short-term borrowing in the bond markets to help the state pay its bills.

"My obligation as treasurer is to make only prudent investments of the funds under our care, not to enable continued budgetary dysfunction and a chronically unbalanced budget," Torsella said.

After the House adjourned Tuesday without a vote,  Majority Leader Dave Reed (R., Indiana) said the chamber intends to push out a proposal this week even if it means that lawmakers must work through the weekend. Representatives are scheduled to reconvene Wednesday.

House Republicans are discussing ways to amend a plan presented last week by a group of rank-and-file members, many of them fiscal conservatives. Their plan would balance the budget by raiding special funds earmarked for a range of services, from toxic-site cleanups to mass transit.

The proposal has come under scrutiny from Democrats, including Wolf, who has called it "nonsense." Even some Republicans, including a number from the Philadelphia suburbs, have balked at some of the proposed fund transfers. That plan did not appear Tuesday to have enough support to pass the House, and Republicans are working on changing portions of the plan.

Exactly how much of that plan would remain in any budget package that emerges from the House this week remains unclear. Reed provided few details Tuesday about which items encountered the most opposition.

But, he said, "I think the general premise of not using taxing and borrowing as our first and last opportunity to balance this budget is a theme that our caucus is pretty united on."

The Senate in July passed a revenue package that would balance the budget the legislature passed on June 30 through a mix of borrowing and new and increased taxes. Wolf has said he supports the Senate's proposal, but tax-averse House Republicans have rejected it.

Senate Republican leaders, in turn, have expressed concern over the direction their House colleagues are headed. On Tuesday, Senate GOP spokeswoman Jennifer Kocher added: "We remain committed to reviewing whatever final product the House sends us, but want to emphasize we need to see that sooner rather than later."

Wolf has not said exactly what he will cut Friday, when the state's main bank account will plunge into a negative balance. He has warned that funding for roads, schools, and other essential services might be in jeopardy.

On Tuesday, Wolf spokesman J.J. Abbott said the governor was still evaluating all options.

But, he said, "the easiest and most responsible option continues to be urgent House action to fund the budget that they passed overwhelmingly in June."

In recent weeks, House members have proposed alternatives to the plan put forward by conservatives in that chamber. Last week, Rep. Gene DiGirolamo (R., Bucks) backed a revenue plan that would include a new tax on natural gas drilling as well as a small increase in the state's 3.07 percent personal income tax.

House Democrats on Tuesday also advocated a similar plan, but it is unlikely Republican leaders will act on it.