Tuesday, June 28, 2016

House Passes Its Budget, Gambling Expansion, But There’s No Agreement With The Senate, Gov. Wolf

House Republicans and Democrats Tuesday voted 132 to 69 to pass Senate Bill 1073 (Browne-R-Lehigh) containing its bipartisan FY 2016-17 General Fund budget proposal totaling $31.55 billion.
But, the House budget proposal has not been agreed to by Gov. Wolf or Senate Republicans.  Rep. Daryl Metcalfe (R-Butler), leader of a conservative bloc of Republicans said he opposed the budget on the House Floor because the “spend number is way too high.”
“Many of us worked together, in bipartisan fashion, to put a good and balanced budget together. We are investing in our schools by increasing PreK-12 and basic education funding by more than $250 million,” said House Majority David Reed (R-Indiana).  “The state’s share of school employee pension payments total another $345 million. All told, this budget increases the state’s share of school funding to a historic high of approximately $11.5 billion for PreK-12 education.
“This budget also deals with mandated spending increases in corrections, human services and public pension obligations – without placing a broad-based tax burden on residents or employers. For the second year in a row, we are standing up for Pennsylvania taxpayers by holding the line on the governor’s original tax-and-spend proposals. In fact, we cut $675 million from the Department of Human Services budget.
“The budget follows the bipartisan passage of important issues everybody has been talking about:  wine privatization and modernizing liquor sales, reforming the public pension systems, as well as legalizing medical cannabis.
“We urge the Senate to pass the bill quickly and for the governor to sign it, in order to avoid another lengthy budget impasse.”
Jeffrey Sheridan, Gov. Wolf’s spokesperson, said in reaction to the House action Monday, “As Gov. Wolf has said, he is focused on a final budget that is balanced with sustainable revenue, invests in education, and provides funding to combat the heroin crisis. The governor looks forward to continuing to work with the legislature, and as the budget moves through the process, he is hopeful all sides can reach an agreement that achieves these goals.”
Click Here for a copy of the line-item budget spreadsheet for the FY 2016-17 budget amendment.  Click Here for General Fund Financial Statement for Senate Bill 1073 posted by House Republicans.
The House also passed House Bill 2150 (Dunbar-R-Westmoreland) authorizing 6 new types of gaming, including iGaming, slots at airports and off-track betting parlors, but no video gaming machines, by a vote of 114 to 85. A House Fiscal Note and summary is available.
But, again, there is no agreement with the Senate and Gov. Wolf on its provisions.
Rep. Bill Adolph (R-Delaware), Majority Chair of the Committee, said the bill includes a $200 million increase in basic education funding, $20 million in pre-K funding, $5 million for Headstart, $20 million special education and a $345 million increase in pension payments for school employees, the first time in 15 years the state is meeting its obligations.
Community College funding remains the same as in FY 2015-16, as does higher education generally.
Rep. Adolph said the proposal addresses some environmental funding issues, including restoring Growing Greener Program funding and using about $44 million in General Fund monies to support DCNR’s General Government, State Park and Forest Operations rather than Oil and Gas Lease Fund revenues.
The proposal includes $2.25 million for the Heritage Parks Program.
The Department of Environmental Protection receives a 3.6 percent increase, which represents little more than a cost-to-carry budget.  The only line item to get a real increase in DEP’s budget was for a new combined West Nile Virus and Zika Virus Program line which received $1.4 million more.
Rep. Joseph Markosek (D-Allegheny), Minority Chair of the Committee, said the proposal does not entirely eliminate one-time revenue measures, but they are at an historic low.
He also noted, the $31.5 billion would eliminate the threat of state employee layoffs.
The proposal is to be funded, based on what we know now, by a $480 million increase in tobacco taxes, including new taxes on chewing, e-cigarettes and other tobacco products (the cigar exemption remains); $317 million in expanded gaming, including $267 million from iGaming, slots at airports and off-track betting parlors, $50 million from the second casino in Philadelphia; about $150 million from liquor reforms already signed into law; and $129 million from a new tax amnesty program
A natural gas gross receipts tax is not included in the proposed budget.

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