PennLive: Pennsylvania’s state budget talks, at loooonnnnng last, enter home stretch

By Charles Thompson

The six-month Pennsylvania state budget impasse – after months of political gridlock – is showing significant signs of breaking up.

That’s probably going to mean a tax increase for Pennsylvanians. (Negotiators from all sides are expected to meet this weekend to settle on a final mix of taxes and other income sources designed to raise $650 to $700 million in the current fiscal year; growing to more than $1 billion on a full-year basis.)

It will mean the single-biggest raw dollar increase in aid to public schools that this state has ever seen, plus significant boosts to aid for higher education.

And it’s possible that it may make some cultural history by bringing along a plan that, for the first time since creation of the state-owned liquor stores, would allow an adult to buy a bottle of wine at a supermarket or restaurant.

Now comes the hard part.

Budget negotiators from Gov. Tom Wolf’s administration and the Legislature’s Republican majorities have to closet themselves over the next few days to iron the last remaining hurdles that will turn this framework into a final deal.

And then, they have to sell the components of said deal to members in the state Senate and House, where the majority Republican caucus as recently as Tuesday took what may have been a last, final symbolic stand against increases in one of the state’s broad-based taxes.

One thing’s clear: collectively, the players – and everyone waiting on them – are a lot closer to a finalized, $30.8 billion spending plan then at any other time this year, and that’s created a palpable sense of anticipation.

“It’s pretty locked down, I think,” Dave Thomas, chief counsel to Senate Majority Leader Jake Corman, R-Centre County, said Thursday night.

That seemed remarkable in itself coming just two days after the House Republican caucus bolted from the so-called framework agreement announced on Nov. 10 and passed, with only GOP votes, a $30.3 billion plan that would require less in new taxes.

Rank-and-file Republicans said then they were angered at having to consider the possibility of raising taxes when they were settling than they had initially wanted in the areas of public pension and liquor reforms.

But after failing to pick up any Democratic votes in the House, and failing to budge the Senate Republican majority from the larger deal, House GOP leaders came back to the framework table Wednesday night.

Final votes could be cast at some point next week.

Here’s an assessment at the some of the remaining issues that must be ironed out (or avoided) before Wolf can sign his first budget.

The taxes:

Expect a free-wheeling discussion this weekend over the final mix of taxes to balance the budget. Leaders reached Friday all balked at giving their personal preferences.

“I think all four caucuses and the administration need to be part of that discussion and we need to come to a conclusion on that before any of the bills start flying,” said House Majority Leader Dave Reed, R-Indiana County.

But sources close to the talks said Friday a number of options have been floated in the last week, including potential increases in either the state’s 6 percent and 3.07 percent personal income tax rates.

Wolf already proposed an income tax increase, coupled with a new tax on Marcellus Shale natural gas production, that was voted down in the House earlier this fall.

If that kind of broad-based tax is the play, it’s a once-a-decade type move that could be a very tough sell in the Legislature, particularly the state House where all 203 seats are up for election in 2016.

About the only thing that seems certain right now is some type of increase in Pennsylvania’s cigarette taxes.

Reed did say Thursday that GOP leaders will still attempt to negotiate for lower spending in the budget, but Wolf warned this week that he considers the current proposed spending level fundamental to the agreement.

“The budget that we all agreed to is $30.8 billion,” Wolf said, after a public appearance in Harrisburg.

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