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Wolf blasts House GOP, says he'll borrow to patch deficit

Written by Marc Levy and Mark Scolforo/Associated Press | Oct 4, 2017 3:16 PM
governor_tom_wolf23.jpg

FILE PHOTO: Gov. Tom Wolf speaks with members of the media during a news conference at the Capitol. (AP Photo/Matt Rourke)


(Harrisburg) -- Democratic Governor Tom Wolf said Wednesday he is tired of waiting for Republican lawmakers to produce a plan to wipe out a projected $2.2 billion deficit and will borrow against profits from Pennsylvania's state-controlled liquor system to help patch it.

Wolf announced the move after efforts all but collapsed in the GOP-controlled House of Representatives in recent days to impose a new tax on Marcellus Shale natural gas production, extend the sales tax on commercial warehousing and nearly double the state hotel tax rate.

In revealing the step to borrow $1.2 billion, Wolf also attacked House Republicans in rare fashion, saying during a press conference in his Capitol offices they had repeatedly failed to deliver a tax package that Wolf deemed large enough to deal with Pennsylvania's stubborn post-recession deficit.

He also accused Republicans of playing partisan politics ahead of next year's election, when Wolf will seek a second term.

"Too many Republicans in the Legislature are more focused on the 2018 elections than on helping Pennsylvania succeed," Wolf said. "They'd rather see me fail than Pennsylvania succeed. They'd rather protect special interests, they'd rather protect lobbyists and campaign donors than do the right thing. I'm not going to play their games anymore, so I'm drawing a line in the sand."

Wolf said his moves will be immediate, coming three months into a stalemate over fully funding a $32 billion budget bill, a 3 percent increase, approved by lawmakers June 30.

Wolf's announcement seemed to mark an end to months of budget wrangling, along with massive casino-style gambling plans being floated in hopes of squeezing tens of millions of dollars more in casino license fees and gambling losses.

Left unclear is the fate of measures carrying nearly $600 million in aid to Penn State, the University of Pittsburgh, Temple and Lincoln universities and the University of Pennsylvania's veterinary school, as well as authorization for another $50 million for Penn State's agricultural extension programs.

Those measures remain stalled in the House.

House Majority Leader Dave Reed, R-Indiana, said he did not oppose Wolf's borrowing plan, saying it is better than a tax increase. Senate Majority Leader Jake Corman, R-Centre, also did not oppose it, although he said he worried about the consequences of ending long-standing state aid to the five schools.

Wolf said he will try to trim the state's workforce and costs to the best of his ability to save money and balance the budget. He said he would protect education funding, senior programs, opioid-addiction programs and economic improvement efforts. But he suggested that spending cuts also will be necessary, saying other spending items "are going to be harder to do."

House Republicans have otherwise supported budget-balancing legislation that would expand casino-style gambling into bars, borrow $1 billion and siphon cash from mass transit and environmental improvement accounts -- plans that were opposed by Wolf and the Republican-controlled Senate. Republicans also have complained that Wolf did not put money into reserve earlier this year when it was clear the state faced a substantial deficit.

Last month, Wolf postponed certain large payments to school districts and Medicaid insurers for lack of revenue flowing into the state's bank account. Soon after, Standard and Poor's lowered its rating on Pennsylvania's debt for the second time in three years, dropping Pennsylvania into the bottom five states it rates.

An earlier story appears below. 

(Harrisburg) -- Democratic Governor Tom Wolf said Wednesday he is tired of waiting for Republican lawmakers to produce a plan to wipe out a projected $2.2 billion deficit and will borrow against profits from Pennsylvania's state-controlled liquor system to help patch it.

Wolf said during a press conference in his Capitol offices that his moves will be immediate, coming three months into a stalemate over fully funding a $32 billion budget bill that lawmakers passed June 30.

Wolf pointed the finger at leaders of the House's Republican majority for failing to come up with enough votes to produce a tax package big enough to meet his demands to pare down Pennsylvania's stubborn post-recession deficit.

"I'm not going to play their games anymore, so I'm going to draw a line in the sand," Wolf said.

Borrowing the money will raise about $1.2 billion, the governor said. He suggested other spending cuts may be necessary without a revenue package. He said he'll manage the state's workforce and costs to the best of his ability to save money.

Wolf is making the move after efforts all but collapsed in the House to extend the sales tax on commercial warehousing, impose a new tax on Marcellus Shale natural gas production and nearly double the state hotel tax rate.

House Republicans have otherwise supported budget-balancing legislation that would expand casino-style gambling into bars, borrow $1 billion and siphon cash from mass transit and environmental improvement accounts -- plans that were opposed by Wolf and the Republican-controlled Senate. House Republicans also have complained that Wolf did not put money into reserve earlier this year when it was clear the state faced a substantial deficit.

Last month, Wolf postponed certain large payments to school districts and Medicaid insurers for lack of revenue flowing into the state's bank account. Soon after, Standard and Poor's lowered its rating on Pennsylvania's debt for the second time in three years.

With the lower rating, Pennsylvania is among the bottom five states rated by Standard and Poor's.
In the meantime, more large payments are due to school districts and Medicaid insurers in October.

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