Pennsylvania Assembly passes budget; $1 billion hole in spending plan

Posted 8/21/12

HARRISBURG, PA — Last year, the general assembly never actually passed a budget, and the stalemate in the capital led to serious cash flow problems for school districts and other organizations that …

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Pennsylvania Assembly passes budget; $1 billion hole in spending plan

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HARRISBURG, PA — Last year, the general assembly never actually passed a budget, and the stalemate in the capital led to serious cash flow problems for school districts and other organizations that depend on payments from the state.

This year, many members of the Senate and House were determined to avoid a repeat of that, and by all accounts worked on a bipartisan compromise that produced a budget before the June 30 deadline. There’s a problem with it, however: the lawmakers did not decide how they will raise the more than $1 billion in additional funds needed to completely pay for the $31.5 billion spending plan.

There will be negotiations about how to come up with the extra funding, and until that happens Gov. Tom Wolf has said he will not sign the budget bill.

Proposals by members of the House to raise the funds include increasing the state tax on a pack of cigarettes from $1.60 to $2.60, allowing the sale of wine in grocery stores, and increasing the amount of legalized gambling in the state—specifically online gambling.

While there are uncertainties about how the spending will be paid for, lawmakers on both sides of the aisle nevertheless praised the bipartisan process that helped get the budget this far.

Rep. William F. Adolph, Republican chair of the House Appropriations Committee, said, “The passage of this legislation represents compromise, which is something sorely missing from our political discourse. This budget held the line on spending in face of spiking mandated costs such as pensions. The budget also made key investments in education with $665 million more for pre-K through 12 education and a 2.5% increase for our state-related universities.”

Senate Majority Leader Republican Jake Corman said, “Day after day, I heard from people in my communities that they could not endure another budget impasse but at the same time could not withstand a massive tax increase. Today, we showed that we were listening by approving a spending plan that funds the priorities of state government, including continuing to provide significant money toward all levels of education, without asking for a broad-based tax increase.”

The increased spending on education was praised by almost everyone who issued a statement on the matter. Democratic Sen. Rob Teplitz said, “I’m pleased that the General Assembly has collectively recognized the critical need to invest in early, basic, and higher education. For too long, our school districts in particular have suffered as a result of inadequate and inequitable funding. Now, we have a budget that significantly increases state support for public education and uses a new funding formula that will divide state funding more fairly among the state’s 500 school districts.”

Still, there were those who also had only faint praise for the spending plan, such as Democratic Rep. Mike Sterla, who said, “This is the first budget in five years, assuming we can get the revenue, that does not increase the structural budget deficit. While it doesn’t reduce the existing deficit, at least it doesn’t continue the practice of spending more than we have in the state coffers.”

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