HARRISBURG — The Pennsylvania House of Representatives will return to session Monday for the first time in seven weeks as a lengthening budget stalemate is drawing warnings by Democratic Gov. Tom Wolf that he is out of options to make payments on time.
Hanging in the balance is $2.2 billion in program funding — about 7 percent of approved spending — and another downgrade to Pennsylvania’s battered credit rating.
At issue is how to come up with the money to keep state agencies, programs, schools and institutions funded at levels supported overwhelmingly by Republican and Democratic lawmakers in a $32 billion spending agreement.
A vote is expected this week on the latest plan, pushed by a group of House Republicans. If it fails, the next step is unclear for the House, led by Speaker Mike Turzai, R-Allegheny.
The Republican-controlled Legislature is averse to the kind of tax increase that would stabilize Pennsylvania’s deficit-riddled finances. Wolf has pledged to squeeze out savings from his workforce, health care costs and prisons, but it’s nowhere near enough, and lawmakers are in little mood for deep spending cuts.
This year, they approved what amounted to a 3 percent spending increase, including nearly $600 million in annual aid to five universities — Penn State, Pitt, Temple, Lincoln and the University of Pennsylvania’s veterinary school — that is part of the bipartisan spending agreement, but awaiting final votes.
Since the fiscal year begin July 1, Wolf’s administration has borrowed money from other state funds to keep the state’s main bank account above zero. Come Friday, Wolf may need to start postponing payments.
The latest plan, developed by about two dozen House Republicans, would divert cash from reserves or off-budget programs, many of them for public transportation or environmental cleanups and improvements.
Wolf opposes it. His administration questions whether the plan is realistic and warns it would have dire consequences for a wide range of communities. The Southeastern Pennsylvania Transportation Authority (SEPTA) — the state’s largest public transit agency — said it would lose almost 20 percent of its budget in the middle of its fiscal year, forcing harsh cutbacks across all services and a 20 percent fare increase.
Meanwhile, the Senate’s plan, narrowly passed in July, relies largely on tax increases, borrowing and another expansion of casino gambling. It is deeply unpopular with House Republicans, and even House Democratic leadership has been silent about it, reflecting rank-and-file discontent.
Wolf supports it.
It includes $200 million from the prospective sale of new casino licenses, although separate legislation authorizing such an expansion hasn’t yet passed and faces long odds in the House. Another $1.3 billion would come from floating bonds. With interest, that ultimately could cost the state $2 billion or more.
It also would increase taxes on consumers’ utility bills — in particular, natural gas service — and impose a production tax on Marcellus Shale natural gas drilling, a key demand of Wolf’s.