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Multiple issues confront Pennsylvania's Republican-controlled General Assembly

| Monday, Jan. 6, 2014, 11:33 p.m.

HARRISBURG — Priorities for the Republican-controlled General Assembly this year include patching a $1 billion-plus budget gap, expanding private liquor sales and curbing state pension benefits, at least for new employees.

After Gov. Tom Corbett, a Shaler Republican, presents his budget on Feb. 4, the “overarching issue” for the first half of 2014 will be passing a balanced budget, said Erik Arneson, communications and policy director for Senate Majority Leader Dominic Pileggi, R-Delaware County.

“Chief among the governor's priorities is an on-time balanced budget,” said Corbett's spokesman Jay Pagni. The state budget faces a “significant impact” if soaring pension costs are not addressed, he said.

Privatizing the state liquor system was an issue Corbett pushed throughout 2013. House and Senate leaders and the governor's office are trying to negotiate a legislative solution, said House Republican spokesman Stephen Miskin.

Because it's an election year for Corbett, all House members and half of the Senate, closing a deficit of up to $1.4 billion will require a budget without any tax increase or major program cuts, said Jack Treadway, a former political science professor at Kutztown University and author of a book on state elections.

“They don't want any sound bite for any campaign that's run against them,” he said. That's especially true given passage of a $2.4 billion transportation revenue bill in October causing price increases at the pumps, Treadway added.

Legalization of the electronic game keno is being considered as a new source of revenue that may in part pay for freezing senior citizens' property taxes, Arneson said.

“To me, if anything is done with taxes, it would have to be something like that,” said Treadway, noting it would be politically popular.

The Legislature on Tuesday returns to session for the first day of the new year. No votes are scheduled in the House. The Senate is likely to re-elect Senate President Pro Tempore Joe Scarnati to the chamber's highest office.

On the education front, the GOP Senate wants to strengthen accountability for charter schools and ensure they are covered by the open meetings, open records and ethics act, Arneson said. Annual independent audits would be required. Senators are awaiting a final report by a commission on special education funding to establish a formula for use in the state budget.

Meanwhile, the debt for Pennsylvania's two pension systems, for state employees and for school employees, has spiraled to $47 billion. Within five years, it is expected to hit $65 billion, Corbett's budget office says. Each Pennsylvania household would need to contribute $13,000 to address that liability. Longer-range potential consequences include spending cuts, tax increases and teacher layoffs, reform proponents say.

Corbett pushed for pension reform throughout 2013, but action stalled as attention turned to transportation in the fall session. Moving new employees to a 401(k)-type plan “will establish the boundaries of the long-term liability and allow the General Assembly and governor to address the short-term issue of skyrocketing contribution costs,” Arneson said.

Such action would be a “first step” toward “a reasonable plan for paying (debt) off,” said Nathan Benefield, a researcher at the Commonwealth Foundation in Harrisburg.

More controversial was Corbett's plan to reduce the so-called “multiplier” formula used to determine pension benefits for employees.

Some legislative leaders remain wary of that concept.

“The governor will work with the Legislature to develop a plan to ensure the long-term stability of the pension system,” Pagni said.

Making the change for new employees at least “stops the bleeding,” Pagni said.

Liquor and pension reform are among the top priorities of GOP House members, along with continued efforts to improve the state's business climate, Miskin said. Ending state control of liquor and wine sales could emerge in various shapes — from selling the state stores to gradually phasing them out.

Senate Democrats maintain “modernization” of the liquor system, such as expanding Sunday sales, would boost revenue for the state.

Other priorities of House and Senate Democrats include full expansion of Medicaid under Obamacare that would bring the state billions from the federal government, they say.

Brad Bumsted is state Capitol reporter for the Tribune-Review. He can be reached at 717-787-1405 and

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