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Wolf: House GOP must get 'act together' on budget

| Tuesday, Aug. 22, 2017, 11:33 p.m.
Pennsylvania Gov. Tom Wolf
Pennsylvania Gov. Tom Wolf

HARRISBURG — House Republican leaders should “get their act together” and return to Harrisburg to resolve a badly out-of-balance state budget that's lingering seven weeks into the fiscal year and risking a downgrade of Pennsylvania's battered credit rating, Democratic Gov. Tom Wolf said Tuesday.

Wolf said the state's main bank account will “run out of cash” in three weeks — about the time a large Medicaid payment is due — as a result of a seasonal low-flow period of tax collections and an entrenched post-recession deficit.

The state has spending authority under a nearly $32 billion budget bill that lawmakers passed June 30, including with the support of 98 out of 121 House Republicans.

However, House Republicans have been unable to produce a revenue plan that would fully fund the spending bill, and they have rejected a $2.2 billion bipartisan tax-and-borrowing plan that narrowly passed the Republican-controlled Senate last month with Wolf's support.

“I think there are a lot of adults in the room in Harrisburg, and some of the folks on the House Republican leadership ought to get their act together and finish the job,” Wolf said Tuesday during an appearance on KDKA-AM radio.

Later, after an unrelated event in suburban Harrisburg, Wolf told reporters that the state will run out of money Sept. 15. He would not reveal how he would handle such an eventuality.

At one point, Wolf said “no” when asked whether he would borrow more money to sustain the state's finances without a balanced budget. At another point, Wolf said he would “do what I need to do” to deal with the situation.

The House, led by Speaker Mike Turzai, R-Allegheny, has no plans to return to Harrisburg before Sept. 11 as small groups of Republicans work behind closed doors in the Capitol to develop a revenue plan. Wolf's administration could theoretically postpone payment on certain bills, such as to insurers or utilities, and it could borrow from the Pennsylvania Treasury, which has reliably bailed out the state during low-flow periods since the recession.

Last week, Treasurer Joe Torsella, a Democrat, suggested he may refuse to continue lending to the state after it finishes paying back a $750 million line of credit this week.

The Senate's plan relies heavily on one-time sources of cash, including borrowing against Pennsylvania's future proceeds from the 1998 multistate settlement with tobacco companies and booking licensing fees from another expansion of casino gambling in the nation's No. 2 commercial gambling state.

It also would increase taxes on consumers' utility bills and impose a production tax on Marcellus Shale natural gas drilling, a key demand of Wolf's.

Many House Republicans are unhappy about the scale of the Senate's proposed borrowing — $1.3 billion — and oppose the tax increases. They instead are exploring plans to divert cash from off-budget programs, such as one that funds road, rail, port, aviation and other transportation projects.

Senate President Pro Tempore Joe Scarnati, R-Jefferson, this week criticized the lack of cooperation by House Republicans in starker terms.

“You can't just sit and pull the pin out of the grenade and roll it in and say, ‘this doesn't work,'” Scarnati said Monday. Cutting $2 billion in spending as an alternative “will be dreadful, and it will be ugly.”

Still hung up in the Legislature are measures carrying about $600 million in aid to Penn State, the University of Pittsburgh, Temple and Lincoln universities and the University of Pennsylvania's veterinary school.

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