Friday, March 11, 2016

After 9 Months, No Due Date For Resolving State Budget Impasse

In 9 months you can make a whole new human being, but there is no clear path forward yet on resolving the state’s budget impasse.
Three weeks of Senate and House budget hearings just concluded only saw a repeat of the same 6 talking points each side has on the budget issue.  Although the word “compromise” was thrown around a lot, it was most often used to say what the other side should do.
There have also been no meetings between legislators and Gov. Wolf to resolve the budget impasse since December, according to Rep. Bill Adolph (R-Delaware), Majority Chair of the House Appropriations Committee.
Gov. Wolf said he is waiting for Republicans to come up with a budget proposal with no “gimmicks.”  Republicans say they put a complete budget on the Governor’s desk in December and he vetoed chunks of it creating a new crisis.  
Gov. Wolf said the Republican budget didn’t have the revenue to support it and he had to veto parts of it.  Republicans say the state has to live within its means and oppose the “massive,” retroactive tax increases proposed by Gov. Wolf.
You get the idea how this is going because you’ve heard it all before.
Senate Republicans opened up a new front in the budget debate this week when Sen. Patrick Stefano (R-Fayette) introduced Senate Bill 1129 that would specifically provide for the payment of certain budget line-items during a budget impasse.
During a Senate hearing in February, State Treasurer Timothy Reese urged the General Assembly to enact new law to help guide decisions on making payments during an impasse.
In response to requests from Gov. Wolf, the State Treasurer made about $37.5 billion in payments during the first phase of the budget impasse that ended the last week of December with the Governor’s line-item vetoes.
Now into the second phase of the budget impasse, the State Treasurer continues to make difficult decisions on whether to make payments requested by the Governor above the line-item veto amounts, for example for the Department of Corrections at the beginning of March.
As further support for making certain payments, the Office of Attorney General published its legal opinion to the State Treasurer on February 25 advising on the Department of Corrections payments in the March 12 PA Bulletin.
After the state missed an $800 million payment to school districts February 25 because the Governor line-item vetoed a half year of their funding, the state School Boards Association this week opened up their own front by again filing a lawsuit against the Commonwealth asking Commonwealth Court to order the state to pay districts what they are owed.
The Association said school districts have borrowed nearly $1 billion to make up for the lack of state funding since the start of the budget impasse. As if to back up that statement, the Allentown Schools Friday said they have to borrow $64 million to deal with the impasse.
Adding to the budget woes, the PA Public School Employees’ Retirement System Friday reported it had negative returns of 1.8 percent in 2015, trailing far behind the 7 to 8 percent annual target of the Fund.  The State Workers’ Retirement Fund report a gain of only 0.4 percent in 2015.
County Commissioners gather in Harrisburg next week for their annual Spring Conference and the lack of state funding for county-run state human service programs is at the top of their list of issues.
So far 34 counties have adopted resolutions like Dauphin County did Wednesday calling on Gov. Wolf and the General Assembly to end the budget impasse and put in place safeguards so future impasses do not negatively affect human service programs.
As an example, Dauphin County had to divert $28 million to its human services programs to keep care flowing during the impasse.  Commissioner George Hartwick said, “I hope it doesn’t take a death or something tragic to occur in order for these situations to be addressed.”
School districts, counties and thousands of vendors and service providers have felt the impact of the budget impasse, but the independent Standard & Poor’s may also have the last word, as well as the courts.
S&P threatened to cut Pennsylvania’s AA-rating for general obligation debt by one or more notches in a report to clients citing the state’s “failure to pass a budget package for fiscal 2016 that addresses long-term structural balance” as the reason.
Budget Secretary Randy Albright said the state has weeks, not months to make this all better.
What’s Ahead
The current voting schedule has the Senate and House back in Harrisburg March 14, 15, 16, 21, 22, 23 and April 4, 5, 6, 11, 12, 13.
The Senate Appropriations Committee has scheduled its first follow up budget hearing for March 14 when the Appropriations Subcommittee on Infrastructure, Environment and Government Operations will review the “Environmental Programs Management and Environmental Programs Operation functions within the Department of Environmental Protection.”
Other, similar Subcommittee hearings and meetings are planned.
Also anticipated is Senate and House action on a variety of supplemental appropriations bills to fill gaps left in the FY 2015-16 budget by Gov. Wolf’s line-item vetoes.  High on the list are supplementals for the Department of Corrections, school district and agriculture program funding.
Giving birth is difficult, painful and there can be a lot of screaming and crying involved.  It appears that resolving the state’s budget impasse is worse.
Unlike giving birth, there appears to be no definitive end date to resolving the state’s budget issues.
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DCNR Secretary Cindy Adams Dunn Written Budget Testimony-Full Text

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