Strong cash flow smooths Pa. budget work, but not Wolf’s agenda
HARRISBURG — With strong tax collections oiling the gears, Gov. Tom Wolf and leaders of the Republican-controlled Legislature are working under the hood of a new spending plan as they head into the final weeks of voting sessions before lawmakers break for summer.
Front and center is an approximately $34 billion budget package that is expected to pass before Pennsylvania’s new fiscal year starts July 1.
Top Republican lawmakers are steering much of the work right now on hundreds of pages of budget-related legislation behind closed doors. A strengthening revenue projection for next year is easing some of the strain of assembling a budget, although there’s never a shortage of demands on the state’s cash.
Meanwhile, the Democratic governor is pressing Republicans to take up at least a couple of his top agenda items before they leave the Capitol until September.
Top Republicans have made it clear that they’ll block Wolf’s $4.5 billion Restore Pennsylvania plan to increase aid for infrastructure and redevelopment needs. Wolf crisscrossed the state all spring to build support for it and his aides say it will pass if put to a vote.
Here is a look at major items before lawmakers:
Budget: Wolf in February proposed a $34.1 billion budget plan for the 2019-20 fiscal year, an increase from the current year’s $32.7 billion approved spending package. The increase largely would go toward early childhood education, public schools and growing costs for health care, pensions and debt.
Wolf is asking lawmakers to approve another $750 million to cover cost overruns in the current fiscal year, making his request more than $2 billion in new spending, or 6% more. The good news for budget-makers is that the state collected about $800 million above its original revenue projection, giving it the cash to cover those cost overruns.
House Majority Leader Bryan Cutler, R-Lancaster, said he wants next year’s spending figure to land well below $34 billion and to deposit money into the state’s budgetary reserve account. Meanwhile, Senate Minority Leader Jay Costa, D-Allegheny, has said he wants to add more money for higher education, early childhood education and community redevelopment aid.
Projections of next year’s revenue collection are about $34.5 billion, after refunds, possibly giving the state a financial cushion.
Wolf’s agenda: Much of the governor’s agenda is treading water in the Legislature.
His proposal to increase the minimum wage — currently at the federal minimum of $7.25 an hour since 2009 — has sparked discussion with Republicans, but no action.
Top Republicans have flatly dismissed Wolf’s Restore Pennsylvania plan and proposal for a tax on Marcellus Shale natural gas production to pay for it.
Wolf has gained little traction with his proposal to raise the minimum wage for public school teachers from $18,500 to $45,000 and to impose a fee on municipalities that do not have their own full-time police force and instead rely solely upon state police for coverage.
Smaller items may pass, such as proposals to pump more money into workforce initiatives, such as skills training for in-demand trades, and to expand the compulsory age for school attendance.
Health care: Wolf’s administration is pressing for passage of a newly introduced bill to take over the online health insurance exchange that’s been operated by the federal government under the Affordable Care Act.
The administration says it can operate the exchange for less and then use the savings, plus new federal reinsurance dollars it can request, to reduce premiums for the 400,000 people who purchase health insurance through the Healthcare.gov online marketplace.
The administration says it can bring the savings into full effect in 2021 if the bill to passes this month.
Transportation: Pennsylvania is under pressure reduce the amount of highway construction funds that pay for state police costs and the amount of Pennsylvania Turnpike toll dollars that go to public transit systems.
Highway dollars now underwrite almost two-thirds of the state police’s budget, $770 million out of $1.3 billion, while the Pennsylvania Turnpike Commission is raising tolls and going deeper into debt to support annual payments of $450 million a year to support public transit systems.
A 2017 report by a state legislative committee suggested that more than $200 million a year in highway construction funds are being diverted unconstitutionally to the state police’s budget.