Pennsylvania House returns, with fight over $2.2B unresolved
HARRISBURG — Pennsylvania's House of Representatives returned to the Capitol on Monday for its first session in seven weeks, but the lawmakers' presence provided no new signs that a two-month budget stalemate will end anytime soon as Republicans argued with each other.
The session gave Republican lawmakers, who make up the majority of the House, their first chance as a group to discuss a plan aimed at balancing the state's threadbare budget, despite opposition from House Democratic leaders and Democratic Gov. Tom Wolf, who called it "nonsense."
The plan would avoid the borrowing, casino gambling expansion and utility service tax increases that underpinned a $2.2 billion revenue package the Senate approved in July. That package was meant to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by lawmakers in a $32 billion spending agreement with Wolf.
The new House GOP plan leans heavily on siphoning money from off-budget accounts that support public transportation systems and environmental cleanups and improvements.
House Republican backers insist the money can be diverted without affecting the programs, but the Wolf administration has contradicted that, saying another $400 million in operating reserves counted in the House GOP plan simply does not exist.
The plan would avoid raising taxes, other than extending Pennsylvania's 6 percent sales tax to third-party sales in online marketplaces.
It is not clear whether it has enough support to pass.
With closed-door discussions ongoing, Rep. Jeff Pyle, R-Armstrong, called it a "coin flip."
"It's very fluid," Pyle said. "A lot of dynamics are going on right now."
The Republican caucus is badly fractured between its anti-tax conservatives and southeastern Pennsylvania moderates who want a floor vote on legislation authorizing a Marcellus Shale natural gas production before they join other budget-balancing measures. Some Republicans would be satisfied by paring back approved spending by $2 billion, while some Republicans say an income tax increase is necessary to fix state government's entrenched post-recession deficit.
No floor votes were expected before Tuesday. House Speaker Mike Turzai, R-Allegheny, informed rank-and-file lawmakers that they would remain in Harrisburg until a revenue package passes.
If this latest plan fails, it's also not clear what happens next. Hanging in the balance is another downgrade to Pennsylvania's battered credit rating and about $600 million in annual aid to four universities — the University of Pittsburgh and Penn State, Temple and Lincoln universities — that give tuition breaks to in-state students.
Since the fiscal year begining July 1, Wolf's administration has borrowed money from other state funds to keep the state's main bank account above zero. However, with tax collections at a seasonal low flow, Wolf has warned that he is out of options starting this coming Friday to make payments on time.
Wolf supports the Senate's plan approved in July. But it is deeply unpopular with House Republicans, and even House Democratic leadership has been silent about it, reflecting rank-and-file discontent.
If lawmakers do not scrounge more money, the state's largest teacher's union warned that a nearly $1 billion cut to public school aid is possible. That would force schools to lay off teachers again, much as they did to survive a nearly $1 billion cut to aid in 2011, Dolores McCracken, president of the Pennsylvania State Education Association, told a liberal group rallying in the state Capitol on Monday.
"Overcrowded classrooms have now become the norm," McCracken said, "and students are paying the price."