If there was one thing every candidate for state office agreed on this spring, it was that a state budget needed to be in place by the June 30 deadline. Last year's spending plan was passed 101 days late: The delay left state workers without a paycheck, crippled agencies reliant on state funding -- and provided ammunition for mid-term campaigns.
It remains to be seen, though, whether this year will turn out much differently.
By the time this issue goes to press, legislators will have 36 days until the deadline. Yet Sen. Jim Ferlo (D-Highland Park) called the status of this year's plan a "gross embarrassment." Rep. Joe Preston (D-East Liberty) is "highly disappointed by the lack of action."
The state Senate Appropriations Committee has before it a $29.03 billion spending plan passed by the House on March 23. But Appropriations chairman Jake Corman, a Centre County Republican, says the committee is not considering it because it's significantly out of balance. They are instead asking the governor to resubmit a budget.
The House plan includes a 6.4 percent increase in basic education subsidy, and closely mirrors Gov. Ed Rendell's budget proposal. But deficit projections have increased since Rendell proposed his plan in February. Originally, they were at $525 million, but state Sen. Jay Costa, the senior Democrat on the Appropriations Committee, says figures have now hit $1.1 billion and could reach $1.4 billion. Legislators must now figure out how to make up the difference.
Costa, of Forest Hills, predicts this year's budget may be a few days late -- but nothing like it was in 2009.
"Last year [the delay] was philosophical differences" on whether to incorporate broad-based taxes or cuts, Costa says. This year, "There's no real reason that we can't sit down and hammer out a budget by June 30." He notes that some of the deficit can be offset by $525 million squirreled away in a budget reserve last year. Senate discussions, he adds, will begin in earnest when May revenues are received after Memorial Day.
But some Democrats say that at this point, the budget is out of their hands -- "especially in the Senate because the Republicans control it," says Sen. Wayne Fontana (D-Brookline). "We're talking, we're letting our voices be heard to our colleagues and to the other chambers, to the House, and letting the governor know. Otherwise, our hands are tied as far as having enough votes to push the process forward."
At this point, the sides seem far apart. After the House budget passed, Corman said it did not address the "fiscal realities" and did "nothing to move the budget process forward."
In a statement to CP, Sen. Jane Orie (R-McCandless) says that, given the deficit, "We need to continue to shrink the size of government, not expand it. As for getting the budget adopted on time -- again, it will fall mainly in the hands of the Governor and his willingness to eliminate his proposed 4.1 percent increase over last year's budget and find savings within government."
And conservatives are using the deficit to push for long-held policy goals. State Rep. Mike Turzai (R-Bradford Woods), for example, argues "the time has come" to privatize the sale of wine and spirits. Under his plan, the state would auction off 100 wholesale and 750 retail licenses currently held by state-run stores. That would generate $2 billion upfront from the license auctions, he predicts -- and $500 million annually in tax revenue. The state currently generates around $466,000 annually in combined tax revenues and LCB profits that are transferred to the general fund, according to Turzai's office.
South Side Democrat Harry Readshaw, meanwhile, is urging that the state could save $700 million by denying state benefits to illegal immigrants. Readshaw acknowledges that House leadership has shown little enthusiasm for the measure, which is currently idling in a House committee.
Other Democrats are also pushing familiar solutions. Some legislators -- like state Reps. Chelsa Wagner (D-Beechview) and Dan Frankel (D-Squirrel Hill) -- want the state to apply for the right to toll I-80 again. That plan, which could generate some $472 million a year, was nixed by the federal government in early April. Other revenue proposals garnering support from the Democrats include: enacting a severance tax on natural gas taken from the Marcellus Shale, which lies beneath much of the state; taxing smokeless tobacco and cigars; and closing the so-called "Delaware Loophole."
Delaware does not have a corporate income tax on "intangible assets," or things like copyrights, trademarks or real-estate investments. Through the so-called loophole, companies incorporate subsidiaries in Delaware and transfer those assets to them, rather than paying taxes to the state where the profit was earned.
The Department of Corrections is also on some legislators' radar. Costa says one Democratic priority is a trio of bills that aims to decrease prison population by providing alternative sanctions and programs for technical parole violators and offenders with shorter minimum sentences or the lowest probability of being reconvicted of a crime. Costa says that corrections costs have increased from roughly $180 million in 1985 to $1.9 billion next year.
"Corrections is a big area where we can keep our cost down," Costa says.
Rep. Preston agrees, calling the system "overbloated." But in any case, he says the House budget started the process and he maintains that the Senate "needs to step up and put it up for a vote and see what they agree on and don't agree on."
Party leaders, especially Republicans, "talk a good game," Ferlo agrees. "But you can't buy the world an ice-cream cone if you can't come up with the revenues to pay for it."
Some legislators are already bracing for possible 2009-style disruptions. Wagner, for example, plans to resubmit legislation she introduced last session that would offer additional funding for prevention programs for domestic violence and child abuse. Her objective, she says, is to ensure steady funding for social services that rely on government help.
And those providers are feeling a sense of urgency. On May 4, the Greater Pittsburgh Nonprofit Partnership, a coalition of more than 350 Southwestern Pennsylvania organizations, called on lawmakers to put a spending plan in place on time.
"Legislators have a responsibility and ethical obligation to prove support to constituents," contended Bernadette Turner, executive director of Addison Behavior Care Inc. "[L]ives depend on what we do."
