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Wolf delaying lawmakers' 2015 grants as budget deadline looms

| Wednesday, June 8, 2016, 2:18 p.m.

HARRISBURG — Democratic Gov. Tom Wolf's top aides told Senate Republican leaders he won't release economic development grants approved by lawmakers until he gets a state spending plan he favors, a Senate GOP spokeswoman said.

Rep. Seth Grove, R-York County, said Wolf is doing so for “political leverage.”

Jennifer Kocher, a spokeswoman for Senate Republicans, said, “The (Wolf) administration has indicated they do not want to engage in discussion about the 2015 grants — despite the fact there are shovel-ready projects that create jobs — until they have a budget they like.”

The $1.6 billion in proposed statewide projects includes projects valued in lawmakers' districts, including public works, university and transportation projects and hotel, office space and a pediatric care unit.

Jeffrey Sheridan, Wolf's spokesman, said it's negotiable.

“Given the difficult fiscal situation in Pennsylvania and looming budget deficit, the administration will carefully review 2015 projects to ensure that funding is distributed in a fair, fiscally responsible manner as we work with the Legislature to balance the 2016-2017 budget,” Sheridan said in an email. “We look forward to finalizing a bipartisan, balanced budget with the Legislature that ensures funding for economic development priorities,” he said.

The warning shot from Wolf comes amid reports of progress on the state budget due June 30. Wolf's first budget wasn't completed until nine months after the 2015 deadline.

Later, Sheridan said, “Republican and Democratic leaders in both chambers agreed to release 2014-15 economic development funding, while holding 2015-16 funding.”

Kocher stood by her statement.

The pending project money includes 105 proposed grants worth $373 million for Southwestern Pennsylvania.

The Pittsburgh-area project proposals include:

• Adding an operating room at Children's Hospital, $4.8 million

• Renovations for the Denis Theatre, Mt. Lebanon, $1.5 million

• $2 million for a Millvale Hotel by Millvale Lodging LP

• A Boeing building expansion in Fayette County

• Renovations at the City-County building, Downtown, $2.7 million

The grant money comes from state debt financed by selling state bonds. Tax money pays the interest on the bonds.

The projects in some cases amount to “corporate welfare,” said Nathan Benefield, vice president of policy and chief operating officer at the Commonwealth Foundation, a free-market think tank. They are reminiscent of the old “walking around money” grants but are “a little more transparent,” he said.

There aren't public hearings about whether projects are worthy of funding, Benefield said.

The state House passed legislation last year to curb the total debt for the program. The bills are pending in the Senate.

Lawmakers propose projects in the state Capital Budget, a massive wish list. The governor then decides which projects to fund.

The projects must have “a regional or multi-jurisdictional impact and generate substantial increases or maintain current levels of employment, tax revenues or other measures of economic activity,” according to the governor's Office of Budget.

Sheridan confirmed that Wolf recently released funding for 2014 projects. The governor released $207.7 million of $1.1 billion requested, according to the budget office website. The governor's office did so after reviewing the projects and making sure release of the funds was “fiscally responsible,” Sheridan said.

The overall debt for these economic development projects through 2014 was $2.7 billion, said Jay Ostrich, a spokesman for House Speaker Mike Turzai, R-Marshall. The debt cap is $3.45 billion. The bill Turzai is pushing would lower that ceiling to $2.95 billion, Ostrich said, and continue to reduce it through the next decade.

Brad Bumsted is the Tribune-Review's state Capitol reporter. Reach him at 717-787-1405 and bbumsted@tribweb.com. Tribune-Review staff writer Mike Wereschagin contributed.

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