Wolf won’t endorse House budget plan, says it’s not balanced

MARC LEVY, Associated Press

HARRISBURG — The Pennsylvania House of Representatives on Tuesday passed the main appropriations bill in a nearly $31.6 billion budget plan, but lawmakers failed to persuade Democratic Gov. Tom Wolf that the plan is either balanced or adequate.

With two days until the state’s 2016-17 fiscal year deadline, Wolf refused to endorse the House’s spending plan, which he said does not include enough revenue to “truly” address a long-term deficit. He said he hoped the Senate would fix the flaws.

“I haven’t agreed to this, and as far as I can tell, there’s still some things to be worked out,” Wolf said during a regularly scheduled appearance on KQV-AM radio in Pittsburgh.

While it is not “a helpful thing to basically throw it over to the Senate … what I see so far I’m concerned about, greatly concerned,” he added.

The Republican-controlled House passed the main appropriations bill, 132-68, with support from House Democratic leaders, putting Wolf in a position of criticizing a plan his close allies are backing. It calls for a 5 percent increase in spending and holding the line on state taxes on income and sales, House officials said.

Top Senate officials also have been cool to the House’s spending and tax plans, and many details about them remain under wraps. One of those items is the question of where the House will find the money to pay for what could be billions of dollars in borrowing for school construction costs in the coming years. Another item is a full slate of proposed tax increases on cigarettes and other tobacco products that House leaders are developing.

House Appropriations Committee Chairman Bill Adolph, R-Delaware, and House Democratic leaders insisted Tuesday that the budget package is properly balanced. However, they have not divulged information on how they came to that conclusion.

Further, Adolph suggested that the package of tobacco tax increases would not be made public until a broader agreement on spending had been reached between House and Senate Republicans and Democrats.

“Once they have come to an agreement with all four caucuses, then there’s various funding issues on the table,” Adolph said.

The plan: The spending plan includes a $200 million boost for K-12 education, a $30 million increase in pre-kindergarten education funding and a $20 million influx for special education. There's also an added $20 million to address Pennsylvania's opioid drug crisis.

Senate Minority Leader Jay Costa, D-Allegheny, said the plan does not include money sought by Wolf and Democrats for distressed school districts, higher education institutions or heroin addiction treatment.

Higher education funding could be a sticking point for senators.

"Like any bill, it's imperfect," Rep. Kevin Schreiber, D-York City, acknowledged. "I don't think anyone who's a student of government or policies would describe the legislative process as delectable. This is an exercise in compromise."

Schreiber is also a member of the Appropriations Committee and voted for the budget.

Efforts to pass a budget ahead of the new fiscal year's start follows a record-breaking partisan budget stalemate in Wolf's first budget year, a deadlock that was not fully resolved until a few months ago.

Concessions: House Republicans have squeezed significant concessions from Wolf, who in February proposed a $33.3 billion spending plan — a 10 percent increase — backed by a $2.7 billion tax plan that also called for higher taxes on income, sales and Marcellus Shale natural gas drilling.

That had included a proposal to raise the per-pack cigarette tax from $1.60 to $2.60 and to extend a 40 percent wholesale tax to sales of larger cigars, loose tobacco, smokeless tobacco and electronic cigarettes. Those products are currently untaxed by Pennsylvania.

The bill that advanced out of Appropriations did not address new taxes, but supporters envision a package of higher levies on tobacco products as well as money from legislation pending in the House that would make Pennsylvania the fourth state to allow casino-style gambling online. Tax fights are perpetually divisive in the Pennsylvania General Assembly.

Rep. Seth Grove, R-Dover Township, said he's not a fan of relying on increased revenue from higher taxes on tobacco products since the government also works to get smokers to kick the habit.

"You can't have one and the other. You can't have both," he said, adding that a higher cigarette tax could drive smokers to buy tobacco in other states where it's cheaper.

Locally: Grove voted Monday to move the nearly $31.6 billion budget plan out of the Appropriations Committee to the House floor even though he doesn't fully support the budget since it delays payments and doesn't address major cost drivers.

"That was a process move" to get it to the floor, he said. "We're a week behind."

The York County House Republican delegation made up of Grove, state Reps. Keith Gillespie, R-Hellam Township; Kate Klunk, R-Hanover; Kristin Phillips-Hill, R-York Township; Mike Regan, R-Dillsburg; and Stan Saylor, R-Red Lion, issued a statement after the House passed the budget.

“As supporters of responsible spending and smaller government, we cannot endorse a plan to increase spending by 4.5 percent while too many of our constituents continue to struggle to make ends meet," the statement read. "It’s hard to cast a vote in favor of growing the size of government while York County homeowners wait for action on substantial property tax legislation (House Bill 504) that the House passed to the Senate more than a year ago.

“Senate Bill 1073 relies heavily on an increased tobacco tax. With cigarette smoking at an all-time low and dropping, it’s not unreasonable to be concerned with how reliable a revenue stream such a tax increase will be. Additionally, cigarette sales in Philadelphia are already $2 per pack higher than the rest of state. An additional $1 per pack will make that region of the state ripe for illicit black market sales, which have proven to fund violent gangs and international terrorist organizations.

“Taxpayers do not deserve another lengthy budget standoff. They also do not deserve to see government spending increase at an unsustainable rate. You can’t spend what you don’t have, which is why we voted as we did.”

York Dispatch staff writer Greg Gross contributed to this report.