Pension, budget questions cloud historic state GOP victory

The GOP in Pennsylvania hasn’t been this powerful in nearly 70 years. A Republican president. Control of both legislative chambers in Harrisburg. And with 34 state senators being seated next year, Republicans scored a symbolic-but-telling veto-proof majority.

But after basking in the glow of victory, the big question among PA Republicans is: “Now what?”

“The dust is settling,” said GOP strategist Ray Zaborney. “Everybody is figuring out where their caucuses will be. This week will be a big deal – everyone is going to meet their new members for the first time.”

But many say the big issues for the GOP are largely the same as before the election: a looming $2 billion structural deficit and a stalled push for pension reform. The election changed little about the politics behind both pieces of legislation.

“It’s not like the chamber went from Democrat to Republican,” said Drew Crompton, chief of staff to Republican Senate President Pro-Tempore Joe Scarnati. “Our mood really hasn't shifted all that much. What's the difference between 31 and 34 senators? The answer is, ‘more members.’”

Others agreed.

“It’s odd in Harrisburg because you think there would be a lot of big things Republicans were going to try and accomplish,” said Matt Barley, a consultant at GOP lobbying firm Long Nyquist & Associates. “But there wasn’t a rallying cry from Republicans saying, ‘We need to get this piece of legislation done.’ It was more a broad-strokes, anti-tax sentiment.”

A last-minute Senate plan to overhaul state pensions had been largely tied up by bipartisan opposition in the House. The election didn’t change that.

“The thing that was most difficult is pension reform,” Barley said. “In the Senate, you didn't need any more support, and I’m not sure the dynamics changed in the House.”

Republicans already held a majority of House seats and insiders said that inability to pass a pension-reform package stemmed from resistance from the GOP’s own state reps. And while union-backed Democratic legislators uniformly opposed the plan, Gov. Tom Wolf had said he would sign the Senate’s proposal, if passed.

Sources said House Republicans worried the reforms, which would create a hybrid retirement system with a traditional plan and alternative 401(k) options, would jeopardize their own state pensions. An “opt-in” feature could have made voluntarily abandoning the more secure, traditional pension plan a kind of conservative litmus test for Republican House members, who earn less than their Senate colleagues.

“On pensions, I don’t disagree that the House is still having difficulty finding a last batch of votes. But there was some turnover during the election, so we’ll have to see how that all looks,” Crompton said.

On the budget issue, no one in either party seems to know how to effectively cut the state’s deficit. 

Crompton said that while the ball was in Wolf’s court to draft an actual budget, he acknowledged there may not be a lot left to cut.

“There is a lot of fundamental belief that we have a spending problem and not a revenue problem,” he said. “I wouldn't say that is all wrong, but it’s not all right, either. We’re a lot skinnier here than we were eight years ago. It’s not going to be easy to pass a balanced budget.”

The new Republican members, elected on a pro-Trump, anti-government wave, could complicate – or at least limit – those efforts.

“They didn’t vote them in there to raise taxes,” said Barley.

Beyond the pension and budget, other GOP priorities include deferred gambling expansion, a long-running lottery privatization plan, and a third go-round on legislation to increase the statute of limitations on sexual abusers.

Crompton said in some ways, PA Republicans had already crossed a lot off their list.

“We didn’t have a shutout season by any means in the last two years,” he said. “We accomplished a fair amount. A very good, solid expansion of liquor sales across the state and the introduction of medical marijuana, for example.”

He added that Trump’s success would put pressure on state Republicans to deliver on the sweeping economic promises the president-elect had made.

“There’s going to be this question on the grand promise of manufacturing revitalization,” Crompton said. “The question is: Can we infuse things nationally and state-related that encourage manufacturing? That’s going to be very interesting to watch on the federal level because it was a big promise of Trump, and the Rust Belt has been so highlighted. We did a very small manufacturing tax credit in the last couple of years...maybe there're more ways of encouraging the jobs tax credit we already have, or other incentives, like the Keystone Opportunity Zones.”

Despite some hand-wringing, one thing was certain among PA Republicans: It beats being the Democrats, especially Gov. Wolf.

“I think what happened on Election Day is certainly a bad omen for Gov. Wolf,” Crompton said. “Most people ran on rejecting Wolf’s agenda – his tax agenda and everything else. The Democrats were already at new lows; this is like off the grid.”