State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.
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Some tentative optimism from GOP on Wolf's budget

Written by Katie Meyer, Capitol Bureau Chief | Feb 7, 2017 5:02 PM

House GOP leaders debrief after Wolf's budget address. They say while they have concerns about the governor's initial proposal, they're going into negotiations with open minds. (Photo by Katie Meyer/WITF)

(Harrisburg) -- After two years of bitter partisan disputes over budgets, the governor is extending something of an olive branch to the legislature's dominant GOP--more than ever before, he's speaking their language.

"Let's start here," Wolf told a joint session of the House and Senate. "In my proposed budget, there are no broad-based tax increases."

That statement was met with cheers from the chambers, but not all the provisions in the proposed 2017-18 plan will be accepted so easily.

Wolf's budget is balanced largely on a little over $2 billion worth of efficiencies.

Some of them were announced ahead of time--namely consolidation of four health agencies into one giant department of Health and Human Services, combination of the Department of Corrections and the Board of Probation and Parole, and closure of a state prison in Pittsburgh.

The plan also keeps state employment at a minimum while incentivizing retirement, cuts tax credits, levies new local fees for state police coverage, and cuts school transportation funding.

It also leases out the Farm Show Complex in Harrisburg for $200 million up-front--a one-time return earmarked to help pay down multi-million-dollar budget shortfalls from this fiscal year.

House Majority Leader Dave Reed said from an efficiency standpoint, his caucus is fairly pleased with Wolf.

"He actually took a lot of our ideas [and] put them into his product," Reed said. "We've appreciated the opportunity to have those discussions ahead of time."

Of course, there are still points of contention.

Despite all the cuts, the budget still includes about a billion dollars in tax increases.

They would mainly affect big businesses, and the list includes a perennially-controversial severance tax on natural gas, as well as selective tax expansions on sales, corporate profits, and insurance premiums.

Wolf sees those measures as closing loopholes being exploited by corporations.

But speaking outside the chamber after the governor's address, Senate President Pro Tempore, Joe Scarnati, said he's concerned the taxes will drive businesses out of the state.

Plus, he added, "corporate taxes continue to decline. They continue to not meet our projections year after year."

All told, Wolf's proposal spends $32.3 billion--up 1.8 percent from the current budget.

There are some increases to education funding, but most of those costs come from payments into the state's overburdened pension and human services systems.

Senate Majority Leader Jake Corman said these high mandatory costs are particularly galling because Wolf didn't include any overhauls to eventually fix them.

"The most telling part to me was what was not in this proposal," Corman said when asked about his gripes with Wolf's plan. "We can do all the things that the governor suggested here today, and we'll be right back here next year looking at a deficit."

Over in the House, Reed took a slightly more positive tack.

"We have a budgetary process that'll begin pretty intently over the next couple days," he said. "I'm sure there'll be a lot of concerns and questions about philosophy and about logistics, but we view this as a much better starting point than we've had in the past."

As in his past budgets, Wolf included a minimum wage increase to 12 dollars per hour. On that, both GOP caucuses had the same take: highly unlikely.

This story has been updated with additional information. 

Published in News, State House Sound Bites

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