The holiday season’s Peace on Earth, Goodwill Toward Men (and Women), didn’t seem to have much impact on the Senate, House or the Governor.

While all sides said they need to work together to get the budget finished after Gov. Wolf’s line-item veto, everyone remains locked into the same positions. 

There were also two new fights started-- one over how the basic education funding Wolf did approve is being spent and a second over the Wolf Administration’s decision to borrow $2 billion to help the cash flow in the General Fund.

House Republicans

House Majority Leader David Reed (R-Indiana) said the House plans to reconvene on January 11 and 12 to work on the 10 percent of the budget that was not approved by the Governor, including funding for Penn State, Pitt, Temple and Lincoln University.

That remaining 10 percent will require additional revenues, but Rep. Reed said lawmakers would be looking to other alternatives, like liquor privatization and an expansion of gambling, before adopting any sort of general tax increase to make up those revenues. 

How the remaining 10 percent gets funded, Rep. Reed said, depends on the outcome of conversations with the Governor and Senate [sic].

Also on tap in the House, he said, is work on the Fiscal Code-- House Bill 1327 (Peifer-R-Pike) -- and Education Code-- House Bill 530 (Reese-R-Somerset)-- bills.  The House Tuesday referred both bills back to the Rules Committee.

When asked whether there will be a return to the budget framework agreed to by all four Caucuses and the Governor in November, Reed said it would have to be considered as a package.

“You’re going to have to see some items back on the table, certainly pension reform, property tax reform, and liquor privatization as well,” Rep. Reed said. “Ideally, we’d like to close out this year and then move to next year, but the governor’s budget address is less than 30 days away [February 9], so whether that’s possible or not depends on which way people want to go.”

Rep. Reed was also quoted as saying any budget deal is dead without the House priorities of full liquor privatization and higher income and sales taxes to reduce local property taxes.

At another point, Rep. Reed floated the idea that maybe his members would accept the line-item vetoes made by Gov. Wolf and move on to next year’s budget.

Senate Republicans

Senate Majority Leader Jake Corman (R-Centre) repeated several times this week there isn’t much for the Senate to vote on, since all the budget-related bills and funding bills for the universities are in the House.

President Pro Tempore Joe Scarnati (R-Jefferson) said, “We’re talking about how we’d like to bring this whole scenario to an end, but certainly the Governor has a role in it and that role has been drawing pretty hard lines.”

“Here’s what [House and Senate Republicans] are in accord with: if there’s no pension changes supported by House Democrats, then clearly there is no new revenue and clearly the Governor is responsible for that,” Sen. Scarnati said. “For the Governor to say he didn’t know the House Democrats were voting as a bloc against pension reform, clearly shows the attitude of ‘I just want tax increases,’ the Governor is saying,” he said.

Senate Majority Appropriations Chair Pat Browne (R-Lehigh) added, “What we have to do is make sure we can get as much done before the Governor’s budget address and—in the end if we are talking about revenue to finalize, which we will be—that all of these things are a part of that because that’s something we’ve committed to.”

In his very short acceptance speech after being unanimously re-elected President Pro Tempore of the Senate, Joe Scarnati quoted a passage from a letter Thomas Jefferson wrote to John Adams, “I like the dreams of the future better than the history of the past.”  To which Sen. Scarnati added, “It sounds like he served in the Pennsylvania Legislature in 2015.”

Gov. Wolf

On Wednesday, January 6, Gov. Wolf distributed a video railing against the “fiscally irresponsible [Republican] budget that increases the deficit and cuts education funding by $95 million.”

Coincidentally, it was the day after the Senate and House reconvened for the ceremonial beginning of their 200th legislative session and then left town again.

“Two weeks ago [actually it was December 29], I vetoed their budget, while releasing emergency funding for schools and key services.  Now, the legislature, which has been on vacation since before Christmas, needs to come back to Harrisburg and finish their work.

“The budget they sent me not only underfunded education and adds to the deficit, it also is plain unfinished. Literally, it is not complete.  It is unacceptable and the legislature needs to come back and immediately pass a responsible budget.

“We have a real chance to make historic investments in schools, truly balance the budget and begin to fix the deficit, and Republicans need to get back to work immediately to finish the job.”

At an event in Pittsburgh Thursday, Gov. Wolf was again critical of Republicans on the budget telling the crowd, “Don’t hire people who think the job is not to show up.”  At the same time, Wolf said, “I'm not sure what more needs to be done. If they don't want to have a budget, I don't know what more I can do beyond what I've already done.”

New Issues

Gov. Wolf used his own authority this week to direct how to spend the $2.8 billion in education funding approved as part of the stopgap budget, since no education bill was passed by the General Assembly.

Republicans say too much of the money is going to Philadelphia schools and the redirection of $58 million in funding hurts charter schools and rural school districts.

Wolf said he’s only following the hybrid education funding formula agreed to, but not enacted, as part of the budget.

Senate Republicans are exploring whether legal action is warranted on Wolf’s school spending.

At the Wolf Administration’s request, the State Treasurer Wednesday opened a $2 billion line of credit in order to ensure the state’s General Fund cash balance does not drop below zero.  The Administration immediately used $1 billion of that to prevent a $922 million deficit in the account.

Wolf blamed the need for the line of credit on the inability of the Republican-controlled General Assembly to deal with the structural deficit.

Both Senate and House Republicans were critical of the move, reminding Democrats they blasted Gov. Corbett in 2014 when he did the same thing.

Senate Republicans said House Democrats have failed to deal with the single largest cost driver in the budget-- pensions.

What’s Next?

The House reconvenes January 11 and 12 and the Senate plans to reconvene on January 19, 20.   Their voting session schedule through June 30 was also released.

Leaders in both chambers say there’s not much point in coming back to Harrisburg unless there’s something to vote on.

Of course the Senate will be busy next week with a hearing January 12 on whether Attorney General Kane can do her job without a law license; a hearing Kane said she would not attend.

The fun and games continue in Harrisburg.

NewsClips:

AP: Pressure Off, PA’s Budget Fight Could Be On Ice

Rep. Christiana Posed To Introduce Natural Gas Severance Tax

Sturla’s New Severance Tax Proposal Would Fund Pensions

Wolf Takes Jabs At GOP Lawmakers In Pittsburgh Stop

Lawmakers Mull Leaving Wolf’s Deep Cuts To Budget

PA Legislative Leaders Pow-Wow On Budget Tuesday

AP: Lawmakers Reconvene, Budget Status Unclear

PLS: Republicans Point Budget Blame Finger At Wolf

PLS: General Assembly Continues Wait-And-See Approach To Budget

Partial Budget Raises Odds Of Work On 2 Plans At Once

New Year Brings No Hint Of Budget Breakthrough

John Baer: PA Politics, What Lies Ahead?

Wolf Borrows $2 Billion To Pay PA Bills

School Funding Distribution Gives Rise To New Battle

Kane Won’t Testify At Senate Removal Hearing

1/11/2016