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WILKES-BARRE — Democratic Gov. Tom Wolf has presented his first state budget and now must navigate the political waters of a Republican-majority legislature to get it passed.
Wolf’s press secretary, Jeff Sheridan, said Wednesday his boss wants to get Pennsylvania off the “status quo” and move forward.
“We inherited a mess,” Sheridan said. “We are faced with a $2.3 billion deficit and the state’s economy is ranked near the bottom in the U.S. in job creation. The governor proposed a budget based on Republican and Democratic ideas and it closes the deficit without gimmicks.”
The state’s new fiscal year starts July 1.
In the past decade negotiations, between the administration and General Assembly often have been contentious, especially when and legislative body majorities and the governor represent different parties. At times state services have been scaled back in early July because of fiscal standoffs.
Jen Kocher, communications director for Republican Senate Majority Leader Jake Corman, said negotiations are key to getting a budget passed, but the GOP is not sure Wolf is willing to negotiate.
Pension issue
“We in the Senate have maintained that the priority is to reform the state pension system,” Kocher said. “Until we resolve that, we can’t address the budget.”
Kocher said an additional $1 billion will be paid into the underfunded pension system this year. She said Wolf wants to address the pension crisis through a bond issue.
“We maintain we can’t move forward with a spending plan until we stop this leaking bucket,” Kocher said. “We can’t continue to put water in that leaking bucket. Until we control or stop that leak, we can’t consider any new revenues.”
Kocher said she isn’t sure how Wolf’s budget is moving the state away from the status quo.
“All the policies the governor has introduced are old (Gov. Ed) Rendell policies,” she said. “We’re not sure how this budget is moving us way from the status quo. Resolving the pension crisis is removing the status quo.”
Rep. Mike Sturla, D-Lancaster, is chairman of the House Democratic Policy Committee. He and Rep. Eddie Day Pashinski, D-Wilkes-Barre, were at the Times Leader this week to advocate for Wolf’s budget proposal.
“This needs to be done,” Sturla said. “We have a fiscal problem and we need to fix it.”
Public education
Pashinski noted that Wolf’s administration also inherited $1 billion in education cuts from the Tom Corbett administration. Pashinski said the governor’s proposal will not only help restore funding for education in two years, it will also reduce school property taxes by more than 50 percent to homeowners.
“The governor’s plan is truly a win-win for the people of Pennsylvania,” Pashinski said. “House Democrats and I believe this proposal is a strong investment to provide a solid education and better future for the youth of this commonwealth and connect the economic improvements to a quality education.
He said Wolf’s budget also provides property tax relief, which will help rebuild the middle class in the state.
Pashinski said Wolf’s plan will also help businesses by lowering the net corporate tax from 9.99 percent to 4.99 percent and eliminating the capital and franchise taxes by 2016.
In a Tuesday story in the Philadelphia Inquirer, Wolf said he doesn’t expect a state budget to be finished by July 1. Wolf has proposed a $29.9 billion budget plan that includes some tax increases to increase education funding and he advocates cutting the state’s corporate taxes and school property taxes.
Sheridan said Wolf’s budget “invests in education with the goal of restoring the cuts made over the past four years. He said Wolf wants to increase education funding by $1 billion.
Sheridan said Wolf’s plan to impose a severance tax on the natural gas industry is something Republicans have favored in the past, but never enacted. Sheridan said the revenue gained from the severance tax would go to education.
“We need to invest in schools, create jobs and close the deficit,” Sheridan said. “And we need to do all of this without the gimmicks used by Republicans over the last four years that put us in this mess.”
Sheridan said Wolf has been dropping by the offices of legislators to introduce himself and to discuss his plan. He has also hosted meetings at the governor’s office, inviting legislators from both parties.
“There are many members of both parties who want to move forward and pass a budget,” Sheridan said. “However, Republican leadership seems content on maintaining that status quo.”
Other issues
House Majority Leader Dave Reed, R-Indiana County, said Wednesday that budget negotiations are expected to pick up next week when legislators go back in session.
“The budget will be at the forefront,” Reed said. “I’m optimistic that we will be able to work with our colleagues on both sides of the aisle and arrive at a responsible and reasonable budget by June 30.”
Reed said it is too early to say the budget will not be passed on time. He said issues like property tax reform, severance tax and liquor sales privatization will be discussed.
Reed said GOP lawmakers will soon reveal a plan separate from budget inclusion, to raise state taxes to allow cuts in the local property taxes that fund public schools. Reed said about 30 House Republicans have been working for months on a proposal that should soon be ready for a legislative committee’s consideration.
Reed also said the plan would call for increases in sales and income taxes to fund dollar-for-dollar reductions in property taxes.
Wolf has proposed raising the sales and income taxes to reduce school property taxes.