Pennsylvania budget planners say end in sight

| Thursday, Dec. 3, 2015, 12:01 a.m.

HARRISBURG — In the sixth month of a state budget stalemate, lawmakers may make a final push this weekend to agree on the details of historic education funding, expanding the sales tax base, reforming public pensions and making wine and liquor more readily available.

The plan to increase state spending by 6 percent is far from finalized. There's a “framework” of an agreement, but questions remain on the tax increase. Some Republicans question the robustness of liquor and pension proposals.

Several session days are scheduled next week.

Senate Majority Leader Jake Corman, R-Centre County, when asked how much is agreed to, said: “Ninety percent, but that last 10 percent is the bumpiest.”

“We have to be close,” said Democratic Gov. Tom Wolf. “We worked through the past weekend. We need a budget soon.”

Wolf told reporters there's not “any sticking point” but rather a need to work out details and language.

“It looks like the problem is how they come up with the revenue,” said G. Terry Madonna, a political science professor at Franklin & Marshall College in Lancaster.

Though House and Senate Republican leaders ruled out a “broad-based tax increase,” budget negotiators worked out a way to help raise up to $600 million without increasing the 6 percent sales tax. A recent plan to raise the rate to 7.25 percent — 8.25 percent in Allegheny County — fell flat.

Instead, the current proposal would extend the list of services and items subject to the tax. Under discussion: admission to nonprofits such as museums, symphonies and businesses such as bowling alleys, amusement parks, golf courses, ski slopes and campgrounds.

Dry cleaners and other “personal services” such as gym trainers have been discussed for taxation, but it's not clear whether they're still included.

Affected groups are lobbying legislators not to include them in the tax base.

“I hope the Legislature will understand the detrimental impact that this will have on hard-working Pennsylvania families,” said Rob Fulton, president of the Pennsylvania Association of Travel and Tourism.

The Greater Pittsburgh Arts Council sent emails warning about the “detrimental impact” on a sector of the economy.

“We're concerned about the possibility that, as part of the solution to the budget impasse, that sales tax will be applied to nonprofit organizations that are of arts and culture in nature,” said Mitch Swain, executive director of the Greater Pittsburgh Arts Council. “That means performing arts, museums, historical sites, things like that.”

Reflecting the fluid nature of the talks, Swain added: “Truthfully, at this moment, we've been told we're not on the list. But we're warning our members that could change at any moment, and it's important that we ask our elected officials to be cognizant of the difficulties that this could cause.”

Part of the problem is that “people equate sales tax increases with property tax relief,” said Rep. Tom Quigley, R-Montgomery County.

Lawmakers couldn't reach agreement with Wolf on reducing property tax, so that could not be included.

“I just don't see how it is a good step forward,” Quigley said. The liquor privatization and pension reform proposals “don't seem robust enough” to warrant giving up a tax vote, he said.

“I'm not going to vote for a tax increase,” said Rep. Rick Saccone, a Republican who represents parts of Allegheny and Washington counties. He'd like to see a beefed-up pension reform proposal.

The pension proposal under consideration would be a “hybrid” plan, combining a portion of state pensions under a guaranteed formula and the rest in a 401(k)-type plan.

One liquor plan under discussion allows beer distributors to sell wine and liquor if they buy expanded licenses. Grocery stores with “R” licenses could sell wine and beer. But that falls short of the sale of state stores that House Republicans have sought.

“I don't think there is a deal for liquor,” said Wendell W. Young IV, president of United Food and Commercial Workers 1776, which represents state store clerks.

Liquor law changes have been counted on for $200 million toward the budget framework.

Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or bbumsted@tribweb.com. Staff writer Natasha Lindstrom contributed.

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