Many people are beginning to wrap their minds around the House Republicans’ proposed destination-based cash-flow tax and what it means for tax reform. Most people are still looking into the tax’s impacts on trade and how...
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- Pennsylvania Gets a Stopgap Budget—Bitterly
Pennsylvania Gets a Stopgap Budget—Bitterly
In a year-end bid to bring Pennsylvania’s budget impasse to a close, the Pennsylvania General Assembly passed a $30.26 billion budget, representing an increase of more than 4.2 percent over the previous year’s budget. Governor Wolf, who had insisted on additional spending and new revenues, responded to this compromise in the only way he has yet demonstrated in his young governorship: with a verbal assault on his foes.
I am going to exercise my constitutional right to line item veto this ridiculous exercise in budget futility. I’m calling on our legislators to get back to Harrisburg – back to the work they left unfinished last week. In the meantime I’m vetoing their $95 million cut to education. I’m also vetoing other items that they don’t pay for.At the same time, I’m allowing emergency funding for our schools to get out. I’m also letting funding go out to our human service agencies and to our counties. But this is on an emergency basis only.In doing this, I’m expressing the outrage that all of us should feel about the garbage the Republican legislative leaders have tried to dump on us. This budget is wrong for Pennsylvania. And our legislators – the folks we elected to serve us – need to own up to this. They need to do their jobs. This budget is wrong for so many reasons.First, it doesn’t balance. Even with the numbers presented to me by the Republicans before they ran out of town just before the Christmas holiday. This budget doesn’t add up. In fact it leaves a half a billion dollar hole for this year (2015-16). And a $2 billion hole for next year.There’s a reason why the outside rating agencies have downgraded our debt. They’re telling the world what our legislators want to ignore. Our fiscal house is a mess.Second, this pretend budget doesn’t make the investments a prudent state government should make, in things like education.This exercise in stupidity actually cuts education funding by $95 million compared to the draconian Corbett budgets. It does add a modest amount in basic education funding, but then it takes out over $300 million to be used for school construction.By the way, before they left town, our legislators also neglected to provide any funding for Penn State, University of Pittsburgh, Lincoln University, Temple, Penn School of Veterinary Science. The budget they concocted doesn’t have enough revenue to leave any room for doing anything to increase funding for our state universities over 2014-15 levels.This budget is doubly frustrating because we were so close to a reasonable one. I had worked patiently and persistently with Republican leaders over the past many months to agree on a compromise budget.That compromise budget was in balance. That compromise budget invested in our kids and our schools. That compromise budget also included historic pension reform and historic liquor reform. That compromise budget actually passed the Republican dominated Senate by a vote of 43-7. And it passed the House on a number of preliminary votes.Then, before the final vote, the Republican House leaders told their members to go home. I get it that everyone is tired of this stalemate But we were almost there. And this makes what they did all that much more unconscionable. They simply left town before finishing their jobs.They can deny what they did. They can try to justify what they did. They can throw around all the political nonsense they want, but the fact remains. They ran off – pretty quickly at that – before they finished their job. And they left us with a real holiday mess. Let’s not kid ourselves; we still need a budget.We need one that actually adds up, this year and next. We need one that fully funds the needs of our schools. We need one that really covers the cost of our state. We need to pass the budget that the Senate and House passed – Senate Bill 1073. And that I’m ready to sign.If we don’t get this right, we will face massive cuts to education and human services next year. And we’ll see huge increases in local taxes and massive additional cuts to our local schools. Remember 2011? We need to get this right.So, to the legislators elected to do the people’s business: let’s get back to work. Let’s get back to the work the people of Pennsylvania sent you here to do. Let’s get back to work to finish the job you almost finished last week.
Jeff Sheridan, the Governor’s spokesman, explained that this was the Governor “acting like an adult.” True or no, it was certainly a bravura performance. The only question is of the encore.
Because, after all, the Governor did make liberal use of his veto pen, striking more than $6 billion from the budget via line item vetoes, including $3.1 billion for education and $2 billion for Medicaid, on which he plans to send the legislature back to the drawing board, and for which a further deal will have to be reached. “This exercise in stupidity actually cuts education funding by $95 million compared to the draconian Corbett budgets,” the Governor explained in justifying his rejection of the education budget—though in fact, support for public schools was increased by $404 million in the new budget. Per pupil expenditures in Pennsylvania now exceed $15,000.
In lieu of the vetoed education funding, Governor Wolf is releasing emergency funds to school districts and social service providers, authority he has had all along but previously declined to exercise. (There’s that word again.) In time, however, the state will have to authorize education expenditures, and Medicaid expenditures beyond today, and eventually even start working on next year’s budget. The Harrisburg Patriot-News consulted a former president of the Association for Conflict Resolution and the executive director of the Center for Community Peacemaking for guidance on how the Governor and the legislature might find ways to come together, but it doesn’t take an expert in conflict resolution to surmise that yesterday’s press conference was not a productive first step.
For now, the lights stay on—mostly. Schools and social services will operate with emergency funding, and most other government functions will continue. The Treasury has begun processing nearly $3.3 billion in back payments to school districts, counties, and social service organizations. Since the Governor vetoed half of the Medicaid appropriation, however, its funding authorization runs out tomorrow. In practice this means little, since Medicaid checks didn’t stop going out for the lack of an appropriation until now, but certainly, it leaves much to resolve.
The Pennsylvania budget process has proceeded in fits and starts. The original executive budget, with its increases to the individual income and sales taxes and its new severance tax, with a partially offsetting cut to the corporate income tax, has been off the table for a long time. Republican insistence on pension reform gave way much more recently. The remaining squabble is over about $540 million, the difference between HB 1460 and the $30.8 billion “framework budget” the Governor now supports, which would rely on unspecified tax increases—to be voted at a later time—to cover the additional appropriation.
The Governor’s signature on HB 1460, with line item vetoes, represents a stopgap, something he had rejected previously. It allows the basic functions of government to continue as the Governor and legislatures continue to hammer out a more permanent deal. What the decision fails to do is provide any measure of confidence that a longer-term solution is in the wings, and it’s fair to say that there’s plenty of bitterness to go around.
Today, the Governor reiterated his call for the legislature to return to session immediately. Nevertheless, heading into the new year, as far as both sides are concerned, it’s anger and recriminations as far as the eye can see.
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