Budget Work to Continue After Whirlwind of Finger-Pointing

A two-day whirlwind of accusations, counter-accusations and a threat to override Gov. Tom Wolf's veto of a short-term spending bill yielded no firm assurances Tuesday night that Pennsylvania's five-month budget stalemate would end soon.

Wolf's office on Tuesday night said Republicans were guilty of "theatrics" in calling back the Senate into session and threatening to override the Democrat's Sept. 29 veto of a four-month spending bill.

It reiterated his call for a budget by Dec. 4, but made no mention of a deal to replace one that had collapsed in recent days.

"Talks continued with Republican leaders tonight and will take place in the coming days," Wolf's office said in a brief statement.

Earlier Tuesday, Wolf hammered Republicans, saying leaders of the commanding House and Senate GOP majorities could not secure enough rank-and-file support for a sales tax increase they had proposed because their ranks include too many "who just want to blow things up."

"The ball is in the Republicans' court," Wolf told interviewers Tuesday morning during a regular appearance on Pittsburgh radio station KDKA-AM.

For a couple hours Tuesday afternoon, negotiations hit another wall over pension legislation, Republicans said, prompting their threat to override Wolf's veto. After a hasty meeting with the governor, Senate leaders emerged, saying that a new "framework" of a budget agreement was in place and that work would continue on the details.

Votes were possible next week, Senate officials said.

To get by without state aid, school districts, counties and social services organizations have laid off employees, delayed services, let bills pile up or taken out hundreds of millions of dollars in loans. Counties have begun looking into ways to withhold tax collections from the state, or even suing the state. On Tuesday, Standard & Poor's slapped Luzerne County with a steep credit downgrade and Bucks County said it would stop forwarding about $4 million to the state in payments collected on real estate transfers, court fees and other transactions.

Only Pennsylvania and Illinois are operating without state budgets.

The latest effort at securing a budget deal, as outlined by Republicans on Tuesday, involved little in new details. A spending plan of more than $30 billion, up from about $29 billion last year, would include an increase of $350 million in public school aid, or about 6 percent, as a gesture to Wolf's efforts to whittle down disparities between Pennsylvania's poorest and richest school districts.

Meanwhile, the deal included two gestures toward Republican policy pursuits: a substantial reduction in the traditional pension benefit for public school and state government employees, and the shattering of state government control over retail wine and liquor sales.

A cash package of approximately $600 million to support new education spending and to narrow a long-term budget deficit could include higher excise taxes on cigarettes, new excise taxes on smokeless tobacco products and the elimination of some exemptions or perceived loopholes in the sales tax.

It also could include near-term savings from refinancing the state's pension debt — a move that increases long-term costs — and issuing new licenses for private-sector wine or liquor sales.

Under the pension changes, future state government and public school employees would get a new 401(k)-style benefit, but a smaller traditional pension benefit. Republicans had sought the complete elimination of the traditional pension benefit entirely, but Wolf opposed it.

In addition, licensed beer distributors would have the opportunity to sell wine and liquor, while grocery stores could buy licenses to sell wine. Wolf had opposed the complete shuttering of state wine and liquor stores sought by some Republicans.

An earlier deal, first floated two weeks ago by Wolf and Republican majority leaders, unraveled in the last few days. The sides, however, quarreled over why it unraveled.

Wolf said Republicans told him Friday that they could not secure enough rank-and-file support for a 21 percent sales tax increase that they had proposed as the linchpin to a budget deal and a $1.4 billion school property-tax rebate package.

Senate Majority Leader Jake Corman, R-Centre, insisted the sides were entrenched over dueling plans on which school districts should benefit the most from the property tax rebates.

Copyright AP - Associated Press
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