Pennsylvania budget work likely to drag into new fiscal year

Written by Marc Levy, The Associated Press | Jun 29, 2017 4:56 AM

In this Oct. 7, 2015 photo, people walk past the Pennsylvania Capitol building in Harrisburg, Pa. (AP Photo/Matt Rourke)

(Harrisburg) -- Pennsylvania's budget package appeared unlikely Wednesday to be finished by the start of the new fiscal year, as anti-tax Republican lawmakers sort through authorizing more borrowing or casino-style gambling to backfill the state's biggest cash shortfall since the recession.

Senate Majority Leader Jake Corman, R-Centre, said the only agreement during closed-door meetings with House GOP majority leaders and Democratic Gov. Tom Wolf was on a spending figure, a number around $31.9 billion.

The total of new authorized spending could come to about $600 million, including a retroactive increase to go on the current year's books. Top Republican lawmakers have said little about how they will spend the money, and Corman said disagreements remained over individual program amounts as the Senate looks to wipe out various funding cuts proposed by the House GOP or Wolf.

"They're really playing it close this year," said Douglas Hill, executive director of the County Commissioners Association of Pennsylvania.

A House Republican budget plan that passed the chamber in April ordered up belt-tightening and potential layoffs across state agencies and programs, including prisons and human services. It also would eliminate funding for juvenile and adult probation and intermediate punishment treatment, county-run programs that Hill said ultimately save taxpayers money and that counties are trying to get restored in a final budget agreement.

Rank-and-file Republicans say they have heard little from GOP leaders about budget negotiations.

Legislation detailing individual program spending was expected to be unveiled Thursday and pass both chambers before Saturday, the start of the new 2017-18 fiscal year. Figuring out how to raise the more than $2 billion necessary to balance a two-year budget gap has proven to be more complicated, and looked likely to stretch into July.

"There's lots of options, we just have to pick which way to go," Corman said.

Leaders of the House and Senate Republican majorities have largely rejected any sort of tax increase, and various ideas to borrow money to pay the state's bills have emerged.

One option has included borrowing as much as $1.5 billion against future revenue from Pennsylvania's share of the landmark 1998 multi-state settlement with tobacco companies. Another involves borrowing $6 billion in a sort of pension bond-style deal that would garner perhaps $240 million up front for the state and put investment risk on the pension funds.

Meanwhile, House and Senate Republicans still had disagreements Wednesday over the extent of legislation to expand casino-style gambling, including a House-backed measure to allow up to 40,000 slot machine-style video gambling terminals at thousands of bars, truck stops and liquor license holders.

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