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Pennsylvania House GOP hits wall on budget-balancing plan

| Tuesday, Sept. 12, 2017, 7:21 p.m.
Speaker of the Pennsylvania House of Representatives, Rep. Mike Turzai, R-Allegheny, abruptly adjourned the chamber after a brief floor session on Tuesday, Sept. 12, 2017.
Speaker of the Pennsylvania House of Representatives, Rep. Mike Turzai, R-Allegheny, abruptly adjourned the chamber after a brief floor session on Tuesday, Sept. 12, 2017.

HARRISBURG — Stymied by dissension among Republicans, Pennsylvania's House of Representatives put off preliminary votes Tuesday on measures designed to plug the state government's $2.2 billion budget gap with money siphoned partly from public transportation and environmental improvement programs.

Speaker Mike Turzai, R-Allegheny, abruptly adjourned the chamber after a brief floor session, surprising some rank-and-file members of the House's deeply divided GOP majority. The House was scheduled to return to session Wednesday, but it was not clear what the GOP majority's next step will be in a budget stalemate now in its third month.

"Who knows?" said Rep. Scott Petri, R-Bucks. "We had our meetings, everybody staked out their position."

The House GOP plan was written by anti-tax conservatives, but lacked enough support to pass the chamber. It is opposed by Democratic Gov. Tom Wolf, House Democratic leaders and southeastern Pennsylvania Republicans as a way to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by lawmakers in a $32-billion spending agreement.

Leaders of the Senate's Republican majority also have given no sign they would support the House GOP's plan to tap off-budget accounts, including those for public transit agencies, environmental improvements, farmland preservation and county emergency response systems. House Republican leaders were considering how to shrink their plan's transfers to win enough support to pass the chamber, backers said.

Meanwhile, the House's conservative Republican leaders were being pressed by House Democrats to allow a floor vote on a package of tax increases and long-term borrowing, roughly similar to a $2.2 billion revenue package that passed the Senate in July.

With the state's main bank account scheduled to hit zero on Friday, Wolf's administration is warning the eight insurers that administer benefits for 2.2 million Medicaid enrollees that they may not receive their monthly payments of about $800 million on time.

That would force insurers to borrow money to make timely payments to hospitals, physicians and pharmacies that are required by federal law, said Michael Rosenstein of the Pennsylvania Coalition of Medical Assistance Managed Care Organizations.

It would be the first time Pennsylvania state government has missed a payment as a result of not having enough cash, state officials said.

Since the recession, Pennsylvania state government has reliably bailed out its deficit-ridden finances by borrowing money from the state treasury or a bank during periods when tax collections are slow.

However, this year, Wolf has warned that he is out of options to pay bills on time, and a Tuesday letter to Wolf and state lawmakers from Pennsylvania's two independently elected fiscal officers — Treasurer Joe Torsella and Auditor General Eugene DePasquale — underscored that.

In the two-page letter, Torsella and DePasquale said they are "disinclined" to authorize the state to borrow money as long as the state's budget is out of balance. A loan would help the state make its payments on time until the spring, when a large volume of tax collections is due.

But it would also contribute to an "economic 'moral hazard' that effectively increases the long-term risks to the Commonwealth's finances," Torsella and DePasquale wrote.

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