The snow might have shorted the legislative week in Harrisburg, but the state’s longest running dramas-- the budget impasse and what to do with indicted Attorney General Kathleen Kane-- still generated lots of heat.

First, the Independent Fiscal Office delivered the bad news everyone already knew: state revenues are forecast to grow at 3.3 percent annually, while expenditures will increase by 4.5 percent a year.

In other words, state government continues to dig itself deeper into a fiscal hole with no agreement on relief-- either cutting long-term costs like pensions or raising taxes-- in sight.

The IFO said just to balance the budget passed by the Republicans in House Bill 1460, and line-item vetoed by the Governor, would cost another $318 million and next year the deficit is expected to be $1.3 billion, if nothing changes.

The IFO also highlighted the loss of revenue from DCNR natural gas leases on state forest land dropping revenues for this fiscal year by 38 percent.  Most of DCNR’s personnel and administrative costs are funded by these revenues and not the General Fund.

Gov. Wolf proposed last year in his budget proposal to begin the process of weaning DCNR off of the Oil and Gas Lease Fund to pay for administrative costs with a $21.8 million General Fund appropriation.

His proposal was included in the Republican budget passed in December and signed into law by the Governor with $48.7 million more in General Fund money for DCNR's General Government, State Parks and State Forest Operations line items.

On Saturday, the Public Utility Commission published a formal notice in the PA Bulletin reducing the Act 13 drilling impact fee by $5,000 per well reducing grants to local governments and state agencies for environmental projects by as much as $34 million.

The four legislative caucuses and Gov. Wolf did meet once on the budget Wednesday, but did not discuss any specific proposals that would move the process forward.  Here’s a recap of comments and actions on the budget this week--

-- Senate Republicans: Senate Majority Leader Jake Corman (R-Centre) and only the Republicans were working to finalize a supplemental funding bill (Senate Bill 1106 (Browne-R-Lehigh)) to fill the holes in the $30.2 billion budget bill created by the Governor’s veto.  The supplemental would cover the Department of Corrections, Agriculture and other programs, but they didn’t quite get done putting it together.  Republican members kept adding in their favorite programs.

-- House Republicans: House Majority Leader David Reed (R-Indiana) said let’s get the last 10 percent of the budget done around the $30.2 billion spend number the Governor vetoed and move on to the other issues of liquor privatization and pension reform later.  The House also removed several supplemental funding bills from the Table in preparation for a House vote: House Bill 1801- Dept. of corrections, House Bill 1802- Child advocacy centers, House Bill 1803- Dept. of Human Services medical assistance payments;

-- Senate Democrats: Senate Minority Leader Jay Costa (D-Allegheny) said his Caucus is still fighting for its priorities of education, human services, economic development, recreation and other funding, but somehow more revenue has to be part of the equation.  He cited the IFO figures saying either we can’t fund state-related universities or there has to be more revenue, it’s that simple;

-- House Democrats: House Minority Leader Frank Dermody (D-Allegheny) said the $30.8 billion “agreed-to” budget framework spend number (rather than the $30.2 billion budget Republicans passed) is the right number they should be working toward.  He also said liquor and pensions can wait; and

-- Gov. Wolf: The Governor’s Office did not have a reaction to the meeting, but a spokesperson said the Senate and House must “move forward and fix the (structural) deficit and fund schools.”  Talking about the Governor’s budget address February 9, the spokesperson added, “We’re not going to make a huge splash with aspirational messages.”  [We do know of at least one splash the Governor intends to make-- a new Growing Greener funding proposal for environmental programs and projects-- from a DEP announcement last week.]

The public has finally said it does not like the continuing budget impasse.  A new Franklin & Marshall Poll released Thursday found Gov. Wolf is just as popular as Gov. Corbett was-- 33 percent to 31 percent.

52 percent blame the Legislature for the impasse and 32 percent the Governor. Only 15 percent think the General Assembly is doing a good job.

The more surprising result is those polled said state government and politicians were the No. 1 problem facing Pennsylvania, twice as many as education at 18 percent.

What’s Next

The Senate and House will return to Harrisburg the week of February 8 to hear the Governor’s second budget address on February 9.  Hearings on Wolf’s second budget proposal begin on February 22.

NewsClips:

PUC Announces Lower Drilling Impact Fee As Gas Price Drops

Does Wolf Still Want A Severance Tax On Natural Gas?

StateImpact: Gas Royalties From State Forest Land Drop Sharply

PLS: 5-Party Budget Talks Resume, But Leaves Little Insight On Way Forward

Wolf, Legislative Leaders Meet On Budget With New Focus

Analysis: Wolf Is Readying Choose Your Own Adventure Budget

IFO: DCNR Oil & Gas Lease Fund Revenues To Drop Nearly 40%

Legislature Trapped In Budgetary Twilight Zone

Op-Ed: Wolf’s Next Budget, Nothing But Reboot Will Do

Op-Ed: Will Wolf’s 1st Budget Be Done Before 2nd?

Editorial: Legislative Cowardice In Harrisburg

Related Stories:

Independent Fiscal Office: Oil & Gas Lease Fund Revenues To Drop Nearly 40 Percent

Drilling Impact Fees Drop By $5,000 Per Well In 2015, Revenue Loss Could Be $34 Million

2/1/2016