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Hearings Finished, Now the Negotiations Begin/Wolf Predicts June 30 Deadline Will Be Missed

The House and Senate completed their budget hearings with the Wolf Administration agency heads last week, and appear ready to get serious about looking at the budget itself.  But even before the first formal meetings among the House and Senate Leadership and the Governor, it appears all parties expect a contentious couple of months before the June 30 deadlines for a balanced state budget.

Gov. Wolf proposed a series of new taxes, which his team continues to insist must be looked at holistically.  The context of the proposal is to increase state programs and funds, increase taxes, and “change how Harrisburg works.”  It’s effective public rhetoric, especially as it promises reductions in vilified property taxes, but none of the legislators we’ve talked to gives the integrated proposals much realistic chance of actually getting done as the Governor wants.

This week, House Speaker Mike Turzai said the House leadership has been talking to the Governor’s staff, but that serious discussions must now take place.  The suggestion is that the Wolf Administration’s proposals are not serious, and must be reconsidered.  The House is insistent on passing liquor privatization as a budget funding matter as well as political ideology.  Senate Majority Leader Jake Corman said last week that unless and until the Wolf Administration works with the General Assembly to resolve state pension costs, the Senate will be unwilling to consider any other revenue enhancements.

Governor Wolf on Tuesday said he doubts the state will enact the next fiscal year’s budget by the June 30 deadline, and we agree, expecting a long and partisan fight in the Capitol.  “I’m planning on spending the summer here,” Wolf quipped in an interview, adding, “And the fall, and the winter.”

His comments were an unusually stark assessment for a first-term governor facing a budget deadline nearly three months away, and Jennifer Kocher, spokeswoman for the Senate Republicans, said that the Wolf Administration “don’t appear to want to work with the Senate Republicans, but rather just make grand announcements and move forward from there.”

Wolf said he did not yet have a contingency plan to keep the government running if there was no budget agreement July 1. But, he said, “there will be plans in place in case the budget isn’t done on time.”

House Majority Leader Dave Reed said he thought the Governor’s comments were premature, and “lead one to believe he is new at this process.”  Reed said, “I would hope in the future, he would wait till we actually have a meeting before declaring we will have a late budget!”

Reed said the discussion should start with last year’s final budget as the beginning of those discussions, and the governor present the beginning of his discussions, and will ultimately meet in the middle. He noted members of the Republican caucus are interested in property tax reform, pension reform, and liquor privatization, and business tax reform.

Reed said he is confident that by June 30th the governor will have a balanced budget that funds the core functions of state government, and in a manner that is respectful to the taxpayers, on his desk.”

Reed said that with Governor Wolf declaring a “new day” in Harrisburg, he hopes that past history can be put aside to get some major public policy items completed for Pennsylvanians. He said he expected the House to address liquor reform, pension reform, and property tax reductions in a different and more aggressive way than was proposed by the governor.