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Pa. Gov. Wolf vetoes GOP 'stopgap' budget bill

| Tuesday, Sept. 29, 2015, 12:12 p.m.
Stephanie Strasburg | Trib Total Media
In this file photo, Gov. Tom Wolf speaks during a press event announcing Tata Consultancy Services' (TCS) gift of $35 million to Carnegie Mellon University at the university's campus in Oakland on Tuesday, Aug. 25, 2015.

HARRISBURG — Taxpayers will pay the cost of borrowing by school districts that need money during a state budget crisis that will escalate because Democratic Gov. Tom Wolf vetoed a partial spending bill, Republican lawmakers and aides said.

“Taxpayers will be footing the bill,” said Stephen Miskin, a House Republican spokesman.

The costs of interest for 17 school districts and two intermediate units borrowing more than $346 million combined could reach $11.2 million, according to an audit released Tuesday.

“Our students have returned to their schools but much-needed state funding is stalled by the budget impasse in Harrisburg,” said Auditor General Eugene DePasquale, a Democrat. “It's causing financial insecurity in schools across Pennsylvania and already forcing some to borrow money.”

The budget impasse is in its 91st day, and the Legislature and governor haven't solved the spiraling cost of state pensions, said Robert Strauss, an economics and public policy professor at Carnegie Mellon University.

Whether it's Wolf or Republicans unwilling to compromise, Pennsylvania is no closer to a budget and Wall Street analysts will “warn investors the political process is broken” in Pennsylvania, Strauss said.

“This is the 21st century and we're looking like a banana republic state,” Strauss said. The state's bond rating could be downgraded, he said.

DePasquale declined to say whether Wolf should have signed the stopgap budget, and he was challenged at his news conference by Sen. Scott Wagner, R-York County. Wagner said it is disingenuous to say school districts are hurt while tax money still comes into state accounts that could help them.

Wagner contends it should not happen because “everybody is still paying taxes,” said his aide Jason High.

The partial budget amounted to four months of funding totaling $11 billion — about $3 billion of it for schools.

“We don't know how much at this point” will be added in interest payments, said Jennifer Kocher, who speaks for Senate Republicans. “But Gov. Wolf has said those costs will be reimbursed (to districts). Taxpayers will pay for that reimbursement.”

The interest is likely to grow as districts' surplus accounts and property tax revenue dwindle, said Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation, a free market think tank.

“It's astonishing that Gov. Wolf is blocking immediate funding for students, the disabled and struggling citizens unless his tax demands” in higher income and sales taxes are met, Benefield said.

But Stephen Herzenberg, executive director of the liberal-leaning Pennsylvania Budget and Policy Center, said Wolf “did the right thing in vetoing the stopgap budget. Short-term, inadequate funding for schools and human services would eliminate any pressure on the Legislature to shift from the failed policies of the past four years.”

Wolf said the stopgap is part of a Republican budget aim of “taking us backwards.”

“Instead of seriously negotiating a final budget that funds education with a common-sense severance tax, fixes our deficit without gimmicks and provides property tax relief for middle-class families and seniors, Republican leaders passed a stopgap budget that once again sells out the people of Pennsylvania to oil and gas companies and Harrisburg special interests,” Wolf said.

“If the Republican budget became law, our deficit would balloon to $3 billion, and instead of restoring education funding, even further cuts would become necessary, and our credit rating would become junk status — that's unacceptable,” Wolf added.

Senate President Pro Tempore Joe Scarnati, a Jefferson County Republican, and Senate Majority Leader Jake Corman, R-Centre County, responded that Wolf “again said no to vital funding for schools and community organizations. By vetoing the emergency funding plan, Gov. Wolf is preventing $3 billion of state support for schools and hundreds of millions of dollars for social service agencies from immediately reaching those in need.”

Brad Bumsted is Trib Total Media's state Capitol reporter. He can be reached at 717-787-1405 or bbumsted@tribweb.com.

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