In the absence of a House vote Wednesday on the Tax Code bill, Gov. Tom Wolf said he has to act to manage the state budget so that schools and human services get what they need. He said he would--
-- Initiate actions to securitize Liquor Control Board liquor revenue payments to borrow $1.25 billion similar to the way the Tobacco Settlement monies were to be securitized. He noted the LCB has the authority to float this kind of a bond, not the Commonwealth generally;
-- Work with agency heads to manage state employee complement, pointing out that by attrition alone there are 1,600 fewer state employees now on the payroll than there were in January; and
-- Look for other opportunities to monetize state assess.
The Governor was extremely critical of House Republicans saying they again failed to deliver on a budget agreement. They continue to prolong the debate over how to pay for a budget they, themselves, voted for in July, he said, adding they have worked to block a natural gas severance tax. Now they can’t pass their own proposals-- a commercial warehouse or hotel tax.
The Governor also noted the House has not acted to bills to fund state-related universities of Pitt, Penn State, Temple, Lincoln University and the University of Pennsylvania Veterinary School which total about $650 million.
“Too many Republicans are focused on the 2018 elections,” the Governor said. “They would rather see me fail and protect the special interests than have the Commonwealth succeed.”
“Now I’m drawing a line in the sand,” he said.
The lack of action by House Republicans, he added, has handed every taxpayer a tax increase, all because they want to protect a special interest by not passing a severance tax.
“I’ve had enough of the games. This is not the way government is supposed to work,” the Governor said. “Any time they want to take action to finish the budget, that’s great. I can’t just sit here and wait.”
Click Here for the Governor’s full statement.
A move by House Democrats earlier in the afternoon to get severance tax bill out of House Environmental Committee failed 115 to 83 after a rowdy debate.
Reaction
Senate Majority Leader Jake Corman (R-Centre) said with the Governor’s action today the budget is now in place, the schools will be funded, human services will be taken care of, the cash flow problem is resolved and the payroll will be met, that part is complete.
You get a sense there is a finality here, but Sen. Corman said he hopes that is not the case. However, he thought it would be difficult to get some of the code bills or gaming done at this time.
He noted the Senate can come back at any time and he and Sen. Pat Browne (R-Lehigh), Majority Chair of the Senate Appropriations Committee are available for discussions.
He said now it’s Gov. Wolf’s job to manage state expenditures to keep things in balance.
The next shoe to fall is the decision not to fund the state-related universities by the House. The budget balances if the $650 million for Pitt, Penn State, Temple, Lincoln University and the University of Pennsylvania Veterinary School are not funded.
He also pointed out with the revenue projections and a modest increase in expenditures, next year’s budget will also be balanced, again if Pitt, Penn State, Temple, Lincoln and Penn Veterinary School are not funded.
There will be a reaction from those universities at some point in time and clearly they will have to make up those costs somewhere. Lincoln will have a particular problem, Sen. Corman noted.
This action ends an over 170-year relationship with these schools that we would be walking away from which will have a profound impact. If you no longer have a public mission, that will influence how these universities make decisions.
He said he recognizing people think of him as the Senator from Penn State, however, he said there will be 44,000 students at Penn State next year and the year after that. They may be wealthier students, more out-of-state and international students, but he said this action will not hurt his region’s economy.
Sen. Corman said he did not think these actions today will result in an improvement in the Commonwealth’s bond rating any time soon and the state could get more downgrades.
He said the Senate took tough votes because it was the responsible thing to do. Pressed on the lack of action by the House, Sen. Corman said, “I don’t see any point in casing aspersions on one side or another... it was a collective failure.” “This is certainly not the ending we wanted.”
Getting away for a couple of days might be good, he added, cooler heads may prevail. Every day is a new day around here.
(Based on Periscope app webcast by PLS Reporter.)
House Majority Leader David Reed (R-Indiana) questioned the timing of the Governor’s announcement of securitizing Liquor Control Board revenues to float a $1.25 billion bond saying it appears to him people are hell-bent on not privatizing the state’s liquor business.
If the Governor has the legal authority to do the bond, why didn’t he do it a month ago to avoid the credit downgrade. “Looks to me he created a crisis of his own making and a lot of Pennsylvanians are going to get hurt as a result of it.”
Click Here to see his comments.Both the Senate and House are scheduled to return to session October 16 after the Columbus Day holiday break.
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