Friday, June 23, 2017

Obligatory Article Saying State Budget Negotiations Are Coming Down To The Wire

Here we are again, just a mere five voting days away from the deadline to have a state budget in place, and Senate President Pro Tempore Joe Scarnati (R-Jefferson) said Wednesday, “How we close this out [budget] remains to be seen.
Will Republicans--
-- Borrow $1.5 billion against tobacco settlement revenue or securitize some other revenue stream to pay for paperclips and fill the General Fund revenue hole;
-- Approve 40,000 video gaming terminals for everyone with a liquor license (bars, nursing homes and churches);
-- Extend the state Sales Tax to warehousing and storage;
-- Redirect the local share of the present casino tax revenues to the state General Fund, along with adopt new casino license fees;
-- Authorize beer, wine and spirits sales in more private outlets;
-- Shift the Sales Tax on bottles of wine and spirits from the bottle bought by liquor license holders to the individual drink bought by consumers;
-- Sell or lease out state assets like the Farm Show Building or something else; 
-- Special Fund transfers to the General Fund that House or Senate members believe are just sitting there “flush with cash” and not doing anything better; and even
-- Legalizing marijuana (admittedly pretty far down the list).
Or, all of the above?
All these ideas have been suggested to avoid a general increase in the Personal Income Tax and Sale Tax that all parties said are off the table.
Court Decision Wildcard
The Post-Gazette Friday published a story by Laura Legere on questions being raised by the PA Supreme Court decision this week declaring unconstitutional previous budget bills diverting proceeds from Shale gas drilling on DCNR forest land to the General Fund to balance the state’s budget.
She noted the General Assembly in the past, the House Republican budget passed in April and Gov. Wolf’s proposed budget would divert about $100 million from DCNR’s Oil and Gas Lease Fund to pay for the agency’s daily operations.
Nearly one-third of DCNR’s total proposed budget for next fiscal year is supported by Oil and Gas Lease Fund revenues Legere reported.
Aides to Senate Republican leaders said the decision will have minor ramifications because they money from the Fund will be used for conservation purposes by supporting DCNR.
John Childe, an attorney for the PA Environmental Defense Foundation who brought the successful lawsuit and others disagree.
Senate Republicans
Sen. Scarnati said Republicans have generally agreed on a spend number of around $31.8 billion for the new year, but still need to fill a $1.5 billion hole in FY 2016-17 and an $700 million hole in the FY 2017-18 budget at that spend number.
The House Republican budget passed April 4 had a spend number for next year at $31.52 billion.  The Independent Fiscal Office reported an updated revenue estimate for FY 2017-18 of  $32.48 billion, but legislators need to fill the FY 2016-17 hole first.
“I think there is a general desire to get it done on time, there’s no big policy fight that we had two years ago, but the decisions are difficult,” said Senate Majority Leader Jake Corman (R-Centre) said. “Every time you are talking about a $2.2 billion deficit, that’s not an easy thing to solve, so it’s going to take all our collective ideas to solve it, but I think the relationships and the spirit of trying to get it solved are good.”
“Gaming is always tough because it always grows and then everyone’s interest gets involved and then it gets too big to pass; we’re running through all the dynamics of it and no final decisions have been made,” said Sen. Corman. “[VGTs are] a big lift. You’re talking about a significant expansion of gaming, so any time you have a significant expansion of gaming, it’s a big lift.”
House Republicans
“The House passed a budget in April, so we kind of put out a path of where we were headed, we were talking for six months about reinventing government and doing things a little bit differently,” said House Majority Leader David Reed (R-Indiana).  “Now we have to wait and see if the Senate is going to be a partner in reinventing government or whether we are going to be getting back to the status quo. Hopefully, we’ll be moving forward together.”
Governor’s Office
On Wednesday, Gov. Wolf expressed concerns about several of the ideas Republicans floated to deal with the budget, including borrowing against future state revenue and legalizing gambling on video gaming terminals.
"I want real revenue, and I want net revenue… something that is recurring revenue, not another one-time fix, not another thing that just kicks the budget problem, the deficit problem down the road for another year or two," Gov. Wolf said. "I don't want anything that we do in gaming or gambling to interfere with the revenues that are already in place. If it just cannibalizes and takes from one bucket called gambling to another, the Commonwealth isn't doing anything more than it has in the past."
Gov. Wolf renewed his call for a severance tax on natural gas production and other revenue measures in his proposed budget, although none of the revenue would be earmarked for environmental purposes.
It’s interesting to note Gov. Wolf has not signed a single General Fund budget bill since he became Governor.  He let his first two become law without his signature and this one might be a third.
Well, there are still five voting days left.
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