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Budget fight of cuts vs. taxes heads to Pennsylvania Senate

Written by The Associated Press | Apr 10, 2017 3:59 AM
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Photo by Office of Gov. internet stream

Governor Tom Wolf delivers his 2017 Budget Address.

(Harrisburg) --  Pennsylvania's House Republican majority this week muscled through a $31.5 billion response to Gov. Tom Wolf's budget plan. It now goes to the Republican-controlled Senate with a heavy emphasis on belt-tightening in human services, prisons and state operations to whittle down a massive deficit.

The big challenge in the Capitol is figuring out how to fill a stubborn post-recession deficit, recently projected at nearly $3 billion. Wolf, a Democrat, in February proposed a $32.3 billion spending plan, a relatively austere budget compared to his two previous proposals.

A look at how the competing plans shape up:

POLITICAL RHETORIC

Big promises are getting a lot of mileage.

The House GOP attacked the budget promising to "reinvent" government. What they did was make cuts in state agency operations and programs nearly across the board. In particular, they cut human services budgets and big chunks of mandatory spending, such as prisons and health care for the poor.

They also left intact many cuts proposed by Wolf. The governor had promised $2 billion in cuts and savings in his budget proposal.

But more than half of it arguably is not a cut or savings, strictly speaking. For instance, it counts hundreds of millions of dollars in cost avoidances that might have materialized anyway.

WHO PAYS THE BILL

Income and sales tax rates would see no increase under either Wolf's plan or the House plan. That makes most Pennsylvanians winners, as far as that goes. They could be losers in other ways, however.

Spending cuts in aid to human services and criminal justice programs in the House GOP plan could result in county property tax increases, counties are warning.

Meanwhile, the House's opposition to Wolf's $1 billion tax package, framed by Wolf as making companies pay their fair share by closing tax loopholes, creates a few winners, including the Marcellus Shale natural gas industry and some health insurance customers.

It also includes the extension of a 2 percent premium tax to a range of health insurance policies. That would trickle down to a wide range of insurance customers, House Speaker Mike Turzai, R-Allegheny, said.

PUBLIC SCHOOLS

It's a mixed bag.

Wolf and the House GOP agree on increasing aid for public school operations and instruction by $100 million, a bump of nearly 2 percent to $6 billion. School groups have asked for much more, citing rising costs for pension obligations. Both plans carry an extra $25 million for special education, an increase of 2 percent, but would cut school transportation aid by $50 million, or 9 percent.

EARLY CHILDHOOD EDUCATION

Both plans carry substantially more aid to pay for high-quality pre-kindergarten classes. Wolf wants another $75 million, an increase of 38 percent to $271 million. The House is aiming for $25 million more.

HIGHER EDUCATION

Both plans would leave higher education aid virtually unchanged at about $1.6 billion.

CASINOS, LIQUOR PURVEYORS

The House GOP bill contains a roughly $800 million hole, and proposes to close it through taxes and fees on the expansion of casino-style gambling and the private sector sale of wine and liquor.

THE MEDICAID SURPRISE

Wolf and lawmakers wondering how they'll wrestle the rising cost of health care for the poor are, for the moment, winners. For now, last year's projections for steep increases in Medicaid are being dialed back.

One reason is more people than expected who are signing up for Medicaid are qualifying under the 2010 health care law, rather than the traditional Medicaid program. That means the federal government foots more than 90 percent of the bill, rather than half.

INTELLECTUAL DISABILITIES

Wolf and House Republican agree on another point: homecare and employment services for 55,000 adults who have an intellectual disability or autism need a big boost.

Wolf proposed another $195 million, or 13 percent more, to whittle down an emergency waiting list, bridge a gap in services for students graduating high school and bump pay for the first time in at least five years for people who work with the intellectually disabled. House Republicans left it intact.

An earlier story is below:

Pennsylvania's House Republican majority this past week muscled through a $31.5 billion response to Gov. Tom Wolf's budget plan.

It now goes to the Republican-controlled Senate with a heavy emphasis on belt-tightening in human services, prisons and state operations to whittle down a massive deficit.

The Democratic Wolf proposed a $32.3 billion spending plan in February. It's a relatively austere plan compared to his two previous proposals.

Income and sales tax rates would see no increase under both plans. But counties warn that House GOP spending cuts in human services and criminal justice programs would force increases in county property tax bills.

Meanwhile, the House GOP is opposing every penny of Wolf's $1 billion tax plan. Wolf says his plan makes companies pay their fair share by closing tax loopholes.

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