Friday, September 29, 2017

Day 94 Without A Complete State Budget; House Fails To Get Enough Votes For A Severance Tax

Senate and House leaders and Gov. Wolf continue their now 94-day marathon discussions (as of Monday) on how to fill the $2.2 billion budget hole, but a final agreement last week was elusive.
As a first possible step in an overall budget plan, House Republicans leadership said they would allow a vote on a natural gas production severance tax bill through a little-used mechanism of forcing the bill-- House Bill 113 (Harper-R-Montgomery)-- out of Committee.
The bill is now not really a severance tax after it was amended in Committee to simply rename the Act 13 drilling impact fee “severance tax,” and it has to be amended, after getting it out of Committee, with a real severance tax.
Attempts to gather enough Republican and Democratic votes Monday and Tuesday to take the first step-- getting it out of Committee-- failed and the House went home early on Wednesday.
Discussions continued through the week and no doubt the weekend to try and find a combination of recurring revenue, borrowing, one-time transfers from special funds, gaming expansion and possibly liquor expansion that would get enough votes to pass and put something on the Governor’s desk.
October 1 Deadline
Gov. Wolf said the previous week he could “stave off” any further delays in payments or funding cuts until about October 1.  The further into October without a revenue plan, the dicer it gets on whether the state can pay its bills.
We may see in the next week or so if the Governor intends to delay payments on some big ticket items to avoid a zero balance in the state’s checkbook and which items they will be.
On September 15 Gov. Wolf delayed over $1.7 billion in payments to avoid going into the red.
No Loans Until There’s A Budget
Speaking at the Pennsylvania Press Club Monday, State Treasurer Joe Torsella repeated his position he will not loan the state General Fund any more money to avoid a zero balance it its account before there is a revenue plan.
"Is it prudent to make an unprecedented loan to a borrower that doesn't yet have a plan in place to bring revenues and expenditures into balance? The simple answer is no," Torsella said.
House Republicans have been critical of his position saying such short-term loans were done in the past.
September Revenue Numbers
Monday the Department of Revenue should release September revenue numbers which should indicate whether the state is making up any ground or falling further behind.
What’s Next?
The Senate announced Thursday it was coming back to Harrisburg early for a voting session October 2, 3 and 4 presumably to bring more pressure to bear on getting a budget solution.  They had not been scheduled to come back until October 16.
The House was scheduled to come back October 2, but at this point there is no clear strategy and everything remains on the table.
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