Gov. Tom Wolf Tuesday announced he would line-item veto $6.864 billion of the $30.263 billion House Republican budget in House Bill 1460 (Adolph-R-Delaware) -- allowing six months of school district, other state and all federal funding to be available.
What remains is a $23.399 million General Fund spending authorization.
Wolf said the Senate and House left town before their work was done and called the Republican budget an “exercise in stupidity” that shortchanged schools, did not balance and did nothing to address the structural deficit.
He called on the General Assembly to return to Harrisburg to finish its work.
Neither the Senate or House have plans to come back to Harrisburg on a date certain. The General Assembly will be in Harrisburg January 5 for the ceremonial beginning of the 2016 session.
There are now 34 days until Gov. Wolf's second budget address on February 2, ironically, Groundhog Day.
There are now 34 days until Gov. Wolf's second budget address on February 2, ironically, Groundhog Day.
Items Vetoed
The Governor’s Budget Office released a list of General Fund line-items vetoed by the Governor. They include--
-- DEP - $900,000 for Sewage Facilities Planning Grants
-- DCNR- $2.2 million for Heritage Parks
Click Here for a list of items vetoed, changed (in yellow). [Click Here for a copy in another format.]
Gov. Wolf’s Remarks
“I’m vetoing the Republican plan to cut $95 million from education, and I’m also vetoing other items that they don’t pay for,” said Gov. Wolf. “I’m calling on our legislators to get back to Harrisburg – back to the work they left unfinished last week. 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, but especially because it does not balance, increases our deficit and fails to invest in our schools and our future.”
Gov. Wolf vetoed parts of the budget because Republicans did not pay for their spending and to ensure a more responsible budget, but he is taking action to ensure that schools receive money owed to them through December 31.
Gov. Wolf limited emergency funding to a half-year appropriation (based on the agreed-to bipartisan budget) for basic education funding, state corrections institutions and medical assistance capitation.
As Gov. Wolf said for months, Pennsylvania is facing a massive structural budget deficit as a result of years of Republican budgets that were out of balance. This multi-billion dollar deficit cannot simply be wished away. The Republican budget is not balanced and will grow the Commonwealth’s multi-billion dollar deficit.
This budget spends $30.3 billion dollars without sufficient revenues to pay for it. Assuming that we would certify the current year revenue estimate at the amount recommended by the Independent Fiscal Office earlier this month, if the governor signed this bill, the Commonwealth would end the year over a half a billion dollars out of balance with a structural deficit of over $2.3 billion.
While Republicans may claim that they have finished the job, they have not. They have not paid for the budget they passed, which would further increase our deficit that stood at $2.3 billion earlier this year.
In total, the governor released more than $23.3 billion in funding.
Further, the governor rejected the legislature’s desired increases for their own funding and instead reverted their appropriations to flat funding from the previous year. Community colleges, state system institutions and other higher education lines are also limited to flat-funding from the previous year.
The legislature left for vacation without passing appropriations bills for state-related universities, Penn State, University of Pittsburgh, Lincoln University, Temple University, and the Penn School of Veterinary Science, and other “non-preferred” institutions.
The Republican budget underfunds education and uses gimmicks that will actually lead to a $95 million cut in funding for our schools, Gov. Wolf said. Republicans continue to refuse to adequately fund Pre-K through 12 education and their budget fails to fund $305 million in school construction reimbursements. Instead, they claim to pay for school construction by issuing billions in new debt.
However, since the Republican budget fails to take any meaningful steps to fix Pennsylvania’s structural budget deficit – which has already led to five credit downgrades – the Commonwealth will be unable to responsibly issue any debt to cover school construction reimbursements this year and likely into the future, Gov. Wolf added.
The Republican’s failure to provide school construction funding to local school districts and the Commonwealth’s inability to responsibly issue debt will lead to a direct cost to the school districts, which will wipe out any marginal funding increases for local school districts. This means that their budget is an effective $95 million cut to school districts after years of cuts under previous Republican budgets, Gov. Wolf continued.
The Republican budget continues the trend of not only underfunding our schools but also fiscal irresponsibility that have led to massive structural deficits and multiple credit downgrades. Now, those decisions will have a direct impact on our ability to pay our bills and issue debt.
Click Here for a copy of Gov. Wolf’s complete remarks.
Senate Republicans Comment
Senate Majority Leader Jake Corman (R-Centre) said in a telephone press conference Tuesday Gov. Wolf’s line-item veto was expected and his action relieved a lot of pressure on schools. He said he was glad the Senate’s plan to get a budget to the Governor to relieve that pressure worked.
He said Senate Republicans are prepared to work with the House and the Governor to finalize a budget. He expressed disappointment in the Governor for his derogatory comments about the Legislature, but at the same time he noted the Governor approved 90 percent of the line-items in the budget.
Sen. Corman reiterated at one point in the call that pension reform was still an important part of these budget discussions, but did not mention liquor reform. Later he said further changes to the pension bill, as passed by the Senate, would not be something he can support. “We’ve compromised enough on that plan.”
On releasing a proposed tax package, Sen. Corman said there are five parties involved in shaping a tax package, and no plan has been finalized. He added there is also no ultimate spend number to work against.
He did shoot back on the Governor’s assertion the Republican budget bill cut education funding by $95 million saying if you want to get into it, “the Governor by his action today cut $3 billion in education funding,” but we should get passed issues like that.
On coming back to Harrisburg, Sen. Corman said most of the budget-related bills are in the House, including funding for Penn State (in Sen. Corman’s district), but he said his leadership is available 24/7 to come to Harrisburg for further discussions when they are held.
The Senate remains on a 6-hour call.
Click Here to listen to the press conference.
Senate President Pro Tempore Joe Scarnati (R-Jefferson), Senate Majority Leader Jake Corman (R-Centre), Senate Appropriations Committee Majority Chair Pat Browne (R-Lehigh) and Senate Majority Whip John Gordner (R-Columbia) released the following statement:
“We support the governor’s long-overdue decision to release emergency funding approved by the legislature to help schools and social service agencies. This is something we have been advocating for over many months and is exactly why we sent him a budget last week – to release money that has been collected and is being held by the state to schools and communities.
“We are glad that the governor has acknowledged that his actions of full vetoes in the past have meant kids and community organizations have been held hostage by his refusal to release funding and that approach is no longer defensible. He could have used this line item veto months ago and avoided this crisis situation.
“This action essentially resets the clock – giving us time to work toward a fiscally responsible spending plan without jeopardizing core government services.
“We have significant differences with this governor and his calls for increased taxes and spending, and we need to sit down and work through them. We have been negotiating in good faith with him, which is why we are disappointed that he used words like ‘garbage’ and ‘exercise in stupidity’ in his statement. This kind of name-calling and blaming is not necessary or productive as we work toward compromise.
“Now the Governor must demonstrate leadership to get a complete budget passed. The Senate has approved three budget proposals already, and because of his latest line-item vetoes will need to produce a fourth. It’s long past time for the Administration to embrace and work toward the compromise needed to enact a fiscally responsible state budget. We remain committed to achieving that goal.”
House Republican Reaction
Speaker of the House Mike Turzai (R-Allegheny) and House Majority Leader Dave Reed (R-Indiana) issued the following statement:
“Today, Gov. Tom Wolf did what he could have and should have done more than 180 days ago –drive out appropriated dollars to help children and victims throughout Pennsylvania.
“At some point, people have to wonder… how does the governor consider a $30.3 billion budget that increases education funding by more than $400 million without relying on a sales or income tax increase ‘garbage,’ but continues to back a broken $30.8 billion framework budget that increases sales or income taxes without pension reform, property tax relief or real steps to bring our liquor system into the 21st century?
“The reality is that over the last month, the original budget ‘framework’ has fallen apart for a host of reasons – the most significant being the lack of agreement on how to fund it. Certainly, there is a recognition that new revenues will be needed to help fund our state’s priorities, but that recognition must also be respectful of the taxpayers.
“Until today, the governor has fully vetoed every spending plan the Legislature has sent to him since June. While it is important needed funds are finally being released to schools and human service providers, a full spending plan is necessary.
“We understand that compromise is a two-way street, but it needs to be based in reality. It is time to reset the chess pieces and work together to move this state forward and bring about a long-term budget solution. We will continue conversations with the governor and Senate – Republican and Democrat – to come to a reality-based budget solution.”
Speaker Turzai later said House Republicans had no plans to return to Harrisburg on a date certain, but starting January 4 the House would be on a 6-hour call.
House Democrats React
House Democratic Leader Frank Dermody (D-Allegheny) said this about Gov. Wolf’s line-item veto—
“Gov. Wolf has again proved himself to be the strong leader that Pennsylvania needs. He understands the pain that a six-month impasse brought to thousands of people. By signing this bill into law, the governor is working to ensure that emergency funding can flow to schools, counties and human services.
“With the governor’s use of constitutional line-item veto authority to substantially scale back many appropriation lines, the legislature will have to get back to work on an honest budget for a full year, a budget that actually balances.
“I applaud the governor for insisting that work continue on the kind of budget that House Democrats have supported all along. There’s now a chance for all sides to step away from the endless argument of the last six months and look for better ways to finish the work we were sent to do.
“Today’s delivery of partial state funding is significant and welcome, but we still have important work ahead.”
Senate Democrats Comment
Senate Democrats provided the following reaction to Gov. Tom Wolf’s line-item veto of a Republican budget plan.
“The governor’s action today will hopefully force House Republican lawmakers back to Harrisburg to finish work on a responsible spending plan. Legislators need to return to business and work toward the passage of the $30.8 billion budget framework agreement,” said Senate Minority Leader Jay Costa (D-Allegheny)
“The House Republican budget was $500 million out of balance. It does not address the $1.3 billion structural deficit that has hobbled state government and simply continued Corbett-type budgeting for another year. After the House Republicans walked away from a responsible budget plan last week, the governor had few options.
“The governor’s release of six-months of emergency funding for schools and human service programs pushes money to schools and programs that are confronted by serious financial challenges.”
Senate Minority Appropriations Chair Sen. Vincent J. Hughes (D-Philadelphia) said, “The purposeful decision of House Republicans to repeatedly stonewall the agreed-to framework budget has left Pennsylvania’s school system on the brink of collapse, so I applaud the governor’s decision to approve emergency funding for school districts throughout the commonwealth.
“Our schools have gone above the call of duty to keep their doors open. They cannot continue to do that, nor should we allow that to happen.
“Pennsylvania’s financial situation remains an urgent one despite the governor’s action today. Members of the House GOP need to get back to Harrisburg as quickly as they left and approve the agreed-to framework 2015-2016 budget because this is short-term help. Schools will close if the leadership in this lone caucus continues its bad behavior.”
Senate Minority Whip Sen. Anthony Williams (D-Philadelphia) added, “The organizations that operate in the shadows of Pennsylvania life are closing their doors because of House Republicans are willfully and callously ignoring their plight.
“Our human service agencies needed a relief valve from the unfair financial burden being placed on them by one of the four legislative caucuses, and Gov. Wolf rightly gave it to them.”
NewsClips:
Editorial: Unbalanced, Unacceptable Budget
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