State GOP leadership holds high-level budget planning meeting

Harrisburg – In what is likely the beginning of an exhaustive series of high-level budget-related discussions, House and Senate Republican leadership gathered in the Senate Majority Leader’s office Wednesday morning to work on establishing a roadmap and timetable for the coming fiscal year’s budget.

The formal, Republicans-only meeting followed weeks of staff meetings and some bipartisan shuttle diplomacy and individual meetings between House and Senate colleagues.

While the meeting seems to have been light on any substantive agreement between the two majority caucuses on specifics for a final, balanced spending plan, it did set the stage to get the budget and related legislation through the legislative pipeline.

“We’ve been pretty focused over the last couple of weeks on finishing pensions and getting the gaming bill further down the road,” said House Majority Leader Dave Reed (R-Indiana) after the meeting.

“We are all committed to getting this done in a reasonable fashion. I know on our side, we met with House Democrats. Everybody worked well on pensions and we hope that the same level of effort will continue from all five parties in the next couple of weeks on a budget.”

Despite not going public with any agreements – with just 16 days before the end of the current fiscal year – some things are coalescing.

The first is the spending number.

According to Senate Majority Leader Jake Corman (R-Centre), the Republican majorities are eyeing a final budget spend close to what the House Republicans passed in House Bill 218 earlier this spring: a number that came in around $31.52 billion, which is more than $800 million less than Gov. Tom Wolf proposed in his February budget address.

“I think we want to try to have a spend number around what the House passed,” Corman said Wednesday. “Finding ways to support that will be challenging enough, so we don’t want to go higher than that.”

That might be a stumbling block for Democrats.

For weeks, the Wolf administration and the Democratic members of both the House and the Senate have been anything but silent on the effects House Bill 218’s spending levels could have on current governmental services.

Just last week, the Wolf administration’s Department of Human Services was sounding the alarm on how the spending plan – and its proposed $62.9 million cut to Child Care Services – could negatively impact working families and add 10,000 families to the waiting list for child care services.

The second budget component needed to set the budget revenue discussion stage is getting a gaming revenue bill through the Legislature.

According to Corman, a Senate response to the House-passed gaming expansion bill is likely to clear his chamber as early as next week; however, the final components of the bill remain unknown.

“There’s a couple big issues that we need to put aside for now and hammer out all the stuff underneath that,” he said. “You have the local share and some of the other things that go on that are a little different from ours, so we are going to try to hammer that out rather quickly and then it’ll just have to be a leaders’ decision on some of those bigger issues.”

One sticking point for the Senate has been the inclusion of video gaming terminals (VGTs), something missing from the Senate’s iteration of the gaming expansion measure that passed that chamber in late May.

Corman said a final decision about VGTs and the specifics of the expanded gaming tax rates is still in the works.

House Republican lawmakers have estimated substantial revenue from the VGT component, counting on as much as $389 million from House Bill 218 as part of their revenue reform package.

“Our caucus has been pretty adamant that they support VGTs as part of the budget discussion,” said Reed, “but we’re one of four caucuses. You’ve got the administration involved as well; but I think to the extent that we can maximize gaming revenue, it’s a benefit for everybody.”

Regardless, a spending number close to House Bill 218’s cannot be balanced merely on the back of gaming. It appears – especially with broad-based tax increases taken off the table by Gov. Wolf and Republican lawmakers – that GOP budget crafters are looking again at potential one-time revenue sources to balance the FY 2017-2018 budget and close the FY 2016-2017 budget, which is currently around $1.2 billion short of projected revenues.

“We always look at asset management, we always look at funds that are available within state government,” Corman stated. “Obviously, we aren’t looking at any new taxes, so we’ve got to look within and see what we can do to maximize our abilities with the assets that we have.”

In the near term, both chambers of the Legislature are in recess until next Monday, but staff will continue working over the next several days on formulating the various necessary code bills needed for the budget.

When legislators return on Monday, more high-level meetings are anticipated: lawmakers will have just 11 days until the end of the fiscal year and a traditional summer recess for the state General Assembly.

Jason Gottesman is the Harrisburg bureau chief for The PLS Reporter, a non-partisan, online news site devoted to covering Pennsylvania government.