Republican effort to fund Pa. budget without taxes stalls
HARRISBURG — A House Republican effort to plug a $2 billion hole in the state budget without raising taxes stalled after a lengthy closed-door GOP caucus Saturday, leaving the Pennsylvania Legislature no closer to fully funding the spending plan it passed earlier this month.
House Speaker Mike Turzai, R-Allegheny, sent lawmakers home in late afternoon without movement on a proposal to combine $1.5 billion in borrowing with hundreds of millions drawn from off-budget programs, an approach designed to avoid imposing higher taxes.
Turzai told reporters afterward that his members had rejected “in significant fashion” a plan to leverage annual payments from a 1998 multi-state settlement with tobacco companies to borrow enough money to cover a massive deficit in state finances.
“Our caucus had a robust discussion,” Turzai said. “Securitization is not something our caucus wants to do.”
He said House GOP members did not want to “bail out” the Senate or Democratic Gov. Tom Wolf.
Some Republican members wanted a severance tax on Marcellus Shale natural gas production, or other forms of revenue that will be available in future years, said Rep. Gene DiGirolamo, R-Bucks, a centrist from the Philadelphia suburbs.
“I think we still need some recurring revenue to come into the budget,” DiGirolamo said.
Senate Republican spokesman Drew Crompton said the GOP-majority chamber will return to session in the coming week to work on a funding plan, as well as other elements in the $32 billion budget package that have not been completed.
“Our members, we’ve heard them loud and clear over the past two weeks, they want to do something responsible,” Crompton said.
He said he has doubts that House Republicans are seeking consensus.
“We can only play with people who want to play with us,” Crompton said.
Turzai said it was up to the Senate to send over a tax bill, raising the prospect that his anti-tax caucus may eventually have to decide whether to permit a floor vote on a revenue bill that many of its members would oppose.
“We’re ready to listen,” Turzai said.
House Minority Leader Frank Dermody, D-Allegheny, urged GOP members to have “courage and the wherewithal to step and vote for the money,” restarting talks about how to pay for spending that most of them supported.
If the stalemate continues, it could drive the state’s poor credit rating even lower, and Wolf may have to freeze programs later in the year.
Wolf let the spending part of the budget take effect nearly two weeks ago without his signature.
The governor has said he could support borrowing — if it is accompanied by enough recurring tax revenue to put the state on a path to fiscal solvency. His spokesman said after the session ended Saturday that Wolf was eager to resume bipartisan talks on balancing the budget.
Borrowing that is leveraged with money from the tobacco settlement will add costs of its own and, depending how it is structured, could create shortfalls in government programs the tobacco money currently funds. Those programs include anti-smoking efforts, health research subsidies, hospital care for the uninsured, and nursing, home health and medical care for the elderly, poor and disabled.
Alternative proposals have been floated to raise taxes on electric and natural gas utility bills, telephone services and cable bills.
The budget stalemate has also stalled nearly $600 million in state support for the University of Pittsburgh and Penn State, Temple and Lincoln universities, as well as the University of Pennsylvania’s veterinary school.
House members were told to be available to return to the Capitol on six hours’ notice.