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Pennsylvania has budget peace a week early

| Friday, June 22, 2018, 9:00 p.m.
Tomislav Forgo

HARRISBURG — Pennsylvania achieved budget peace, for now, as Gov. Tom Wolf on Friday signed a $32.7 billion spending package a week early for the upcoming fiscal year, avoiding the partisan acrimony and protracted fights of his first three years in office.

Wolf's signatures came in the hours after the Republican-controlled Legislature sent hundreds of pages of budget legislation to his desk in a flurry of votes, barely three days after the first details of the no-new-taxes package were unveiled.

The package, negotiated behind closed doors between the Democratic governor and Republican majority leaders, won overwhelming support in both chambers.

Broad support for the plan came after three years of topsy-turvy budgets hashed out by Wolf and the Legislature's big Republican majorities.

It was the first full spending bill signed by Wolf, who is running for a second term in the November general election. In 2016, he let a Republican-written spending bill lapse into law after effectively losing a nine-month budget stalemate. In July, he let a bipartisan spending bill that he supported become law despite lacking legislation to fully fund it, and it took another three months to get House Republicans to agree on how to balance it.

Easing this year's process are projections for two straight years of solid revenue gains, perhaps the strongest two-year period of growth since before the recession a decade ago, and a couple big pots of money that fell into the state's lap.

It also helped that Wolf floated the most modest budget proposal of his first term, while June's budget talks seemed free of negotiators drawing contentious lines in the sand.

The budget bill passed amid a rush of activity and votes on bills, including one to bolster school safety. Looming over it was a desire by lawmakers to leave the Capitol and return to the campaign trail ahead of November's election.

Senate Appropriations Committee Chairman Patrick Browne, R-Lehigh, suggested that the state has turned a fiscal corner after a decade of trying to fix persistent post-recession deficits with belt-tightening and short-lived Band-Aids, rather than broad tax increases.

“Today marks a very hard-fought for and welcome change from the experience of the last decade, and a platform to look to the future with the opportunity that fiscal strength and stability will bring,” Browne said in his floor speech.

The new fiscal year begins July 1.

The package boosts spending through the state's main operating account by $700 million, or 2 percent, largely for schools, social services, pensions and prisons.

Still, House officials say the package relies on roughly $1 billion in one-time cash to cover bills. Most of that is being spent on Medicaid costs off-budget, a maneuver that critics say masks the true spending increase and the true cost of state government.

It also likely ensures that budget makers will have to find a new source of cash in a year to replace it while covering rising costs for things like health care, prisons and pensions.

At the same time, the state will face rising debt costs after issuing bonds for long-delayed school construction projects and borrowing heavily to backfill last year's $2.2 billion deficit.

The Philadelphia-based Education Law Center noted that, despite the new money for public schools, the state “has miles to go to achieve a fair and adequate funding system.” The AARP protested that the budget package diverts more than $300 million in lottery cash from programs for the elderly to help pay for Medicaid.

The state spending package is notable for a new $60 million off-budget school-safety grant program, spurred by the February shooting at a Parkland, Florida, high school that killed 17 people.

School districts can apply for a grant for a wide range of purposes, including safety and security assessments, security-related technology, training, counselors, police officers and anti-violence programs.

Meanwhile, Wolf won an extra $40 million, most of what he had sought, to expand high-demand computer and industrial skills training in high schools and colleges.

Republicans otherwise rejected Wolf's overtures for a fourth straight year for a severance tax on Marcellus Shale natural gas drilling and for municipalities to start paying a fee to cover a portion of the state police coverage they receive.

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