Winners and losers – July 2016

After worries Harrisburg would repeat a nine-month budget impasse, lawmakers passed a compromise budget that saw a nearly five percent increase in spending. Most insiders say the budget has more winners than losers, but City&State found plenty of both.

Winners

• Gov. Tom Wolf – After last year’s disastrous nine-month budget impasse, insiders were chattering about “one-term Wolf.” But a recent Quinnipiac survey showed Wolf's approval ratings had crept back up to 40 percent, from just 31 percent earlier this year (For the sake of comparison, Wolf’s predecessor, Tom Corbett, struggled to get above 30 percent approval midway through his second year in office.) In addition to helping avoid another impasse, he can hang his hat on quasi-reform of state-controlled alcohol sales, boosting a response to the opioid crisis and coming through on some promised education funding.

•  Senate Majority Leader Jake Corman & House Majority Leader Dave Reed – It takes two to compromise, and Corman and Reed led their GOP compatriots toward the middle this year, according to political analyst G. Terry Madonna. Along with Senate President Pro Tempore Joe Scarnati, through negotiation or pressure, they were able to get other powerful House figures like Mike Turzai to reverse course after they rejected a strikingly similar compromise budget last year.

• Sharon Pinkenson – Unbelievably, in a year where fiscal concerns and an imperative to simply pass a timely budget led to many controversial interest groups being sidelined, pols gave the nod to a $5 million increase in the state’s film tax credit. Hardly considered an essential program by most, Harrisburg sources say credit for the credits seems to mostly go to aggressive lobbying by Pinkenson, the longtime head of the Greater Philadelphia Film Office. The program enjoys bipartisan support because it is perceived to be an effective jobs creator.

•  Uber, Lyft and Vince Fenerty – Ridesharing services like Uber and Lyft are likely going to be legal statewide, in part because Sen. Vince Hughes helped negotiate a compromise in Philadelphia that directed some of their revenues to the city’s school district in exchange for temporary legalization, which sources say will likely become permanent. But these services had only been nominally illegal because Vince Fenerty, a politically connected figure who runs the Philadelphia Parking Authority, which also regulates taxis, had said they should be — even though he never seemed to care enough about the issue to, say, file a lawsuit against Uber or Lyft when they started operating illegally. In the end, a third of revenue generated by ridesharing services under the deal will be diverted to his agency. Sounds a little like Munchausen syndrome to us...

• Public educators – $200 million for public education isn’t what most schools advocates said the state needed to even out PA's rock-bottom national ranking on the state's share of education spending. But it’s nothing to sneeze at, either.

Losers

• Gov. Wolf – Like many of his Republican counterparts, Wolf sacrificed a lot to get a budget through on time. A far-reaching tax reform plan he introduced last year and an initiative to address the state’s structural deficit were pretty much nowhere to be seen. Excise taxes on gas drillers? Nope. Funding for prisons, parks or public safety? No, not really. In a year where the theme is “compromise,” Wolf won some and lost some.

• Rep. Daryl Metcalfe and Rep. Seth Grove – The same can be said of Republicans in Harrisburg. But the biggest losers in a consensus budget are those on the edges of the ideological spectrum. Members of the ultra-conservative wing of the House, like the loquacious Metcalfe, were “on the outside looking in,” according to one staffer during this year’s budget talks. Once an existential threat to the PA GOP, folks like Grove were often described as an obstacle to compromise in last year’s budget cycle, opposed to any form of new taxation. Now, the Tea Party influence seems to be winding down as Republicans have scaled back their quest for pension reform and true liquor privatization, and traded Wolf’s surrender on new, broad-based taxes for increases in niche taxes.

• Ron Blount – The head of Philadelphia’s Taxi Workers Alliance says he’s not totally against competition from Uber and Lyft, he just wants all taxi workers to get better labor protections. But the TWA launched a vociferous effort to keep ridesharing services illegal in the meantime. Ultimately, Democrats opted for a deal to drum up education funding over solidarity with Blount. He’s promised “chaos” during the Democratic National Convention.

• Charter schools – Known for one of the most aggressive lobbying platforms in the state, the charter school movement tried – and failed – to inject far-reaching new regulations that would greatly increase the ease of opening new charter schools at the 11th hour. But with most of these schools concentrated in urban areas with few Republicans legislators, the effort failed to draw solid interest from conservatives.

• Big Tobacco – With an overall increase in spending of about 5 percent, the additional revenue had to come from somewhere. A bunch of it will be from tobacco sales, fueled by a dwindling number of smokers in the Keystone state. Belaguered PA smokers are now the fifth-largest revenue source in the state, and a 2019 sunset provision for Philadelphia's local $2-dollar-a-pack tax on cigarettes was quietly jettisoned from the tax code this year. Interestingly, cigars once again managed to evade being taxed.