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Pennsylvania

Pa. lawmakers consider 'broad framework' to end 5-month budget impasse

| Monday, Nov. 9, 2015, 11:06 p.m.
Pennsylvania Gov. Tom Wolf arrives for a news conference Wednesday, Nov. 4, 2015, at the Southport Marine Terminal Complex in Philadelphia. Wolf discussed his plan for management, maintenance, and development of the Port of Philadelphia.
Pennsylvania Gov. Tom Wolf arrives for a news conference Wednesday, Nov. 4, 2015, at the Southport Marine Terminal Complex in Philadelphia. Wolf discussed his plan for management, maintenance, and development of the Port of Philadelphia.

HARRISBURG — House and Senate lawmakers of both parties, as well as Gov. Tom Wolf, on Monday were considering the “broad framework” of a potential deal to break Pennsylvania's five-month budget stalemate that includes an increase in the state sales tax from 6 percent to 7.25 percent, significant property tax relief and as much as $750 million over two years for public schools.

“This is the first time we have seen a light at the end of the tunnel,” said Jeffrey Sheridan, Wolf's spokesman.

The details were hazy, such as descriptions of long-sought reforms of the state liquor store system and on curbing the spiraling costs of the state pension system, both priorities of Republicans controlling the legislature.

It appears that a tax on extraction of natural gas is “not a point of discussion at this point,” said House Majority Leader David Reed, R-Armstrong County.

The proposed budget would spend more than $30 billion and increase spending about 6 percent.

“While we're still working out the details, I am hopeful we're nearing the end of this stalemate, and will soon be able to show Pennsylvanians that education is once again our top priority,” Wolf told supporters in an email.

Sheridan declined to say what Wolf had given up to get the proposed “historic” increase in education funding, the governor's top priority.

Sheridan would not say whether the so-called Marcellus shale tax on natural gas, which Wolf touted as a campaign priority in 2014, is no longer under consideration. Wolf proposed it to pay for education.

“How this is going to be paid for is still to be worked out,” Sheridan said.

The impasse hit its 110th day Tuesday.

Reed said higher cigarette taxes are being considered and expanded gaming revenue remains an option. Internet gaming, slots at off-track betting parlors and slots at airports might be part of the mix, Reed said.

House Republicans long insisted that any sales tax increase would have to be “dollar for dollar” in property tax cuts. Stephen Miskin, a Reed spokesman, said that is still the case under this proposal. However, a significant chunk of gaming revenue from taxes on casinos — which now goes to property tax relief — would be “diverted” to help pay for pension costs. How much was unclear. Miskin said it might be $600 million.

Growing pension costs in school districts are one of the main reasons for property tax increases, Miskin said. Using the gaming money to curb pension increases would “alleviate” the need for higher property taxes, Miskin said.

On liquor reform, or some derivative, the goal would be raising between $200 million and $300 million annually toward the budget, GOP officials said.

Senate Majority Leader Jake Corman cautioned Monday that there's no final agreement between Wolf and lawmakers until everything is settled.

Reed is hopeful a deal can be reached by Thanksgiving. Passage will take weeks because there may be 30 to 40 bills involved, he said.

Bill Patton, a House Democratic spokesman, said members had “a lot of questions. There's a lot of optimism, but nothing is settled yet.”

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

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