Area pols back contentious state budget plan

The Republican proposal — a trimmed down version of Gov. Tom Corbett’s initial $29.4 billion proposal — represents a $727 million, or almost 2.6 percent increase, in state spending. Among that is an additional $10.3 billion for K-12 education and $20 million more for special education.

But while Republicans tout the bill as an exercise in fiscal restraint, Democrats argue the spending plan’s education funding is insufficient to help school districts climb back from prior cuts.

In addition, Democrats took issue with the budget’s reliance on $380 in income to be generated through the sale of state-owned liquor stores, also known as liquor store privatization, calling it a short-sighted solution to an long-range problem — namely Pennsylvania’s lagging tax revenue.  

On Wednesday afternoon, Rep. Kathy Rapp, R-Warren, said tax collections have slumped in the years since the economic recession, adding, “people just aren’t spending like they used to.”

In response, the House budget proposal aims to generate revenue through the elimination of certain tax credits, the utilization of $410 million in unused public funds and liquor store privatization.

Rapp, who voted for the House plan, acknowledged criticism of liquor store privatization’s role in it, but said far from a temporary windfall, it will help to sustain Pennsylvania’s coffers for years to come through taxes collected on alcohol sales.

The House proposal was ultimately approved in a 110-93 vote Wednesday. The House is made up of 111 Republicans and 92 Democrats.

The budget is now headed to the state Senate, with four days left before the June 30 fiscal deadline. From there, it returns to the House for approval before going to Corbett for final authorization.

As budget negotiations between the House and Senate begin, there is a measure of concern now on behalf of House Republicans like Rapp, that the Senate’s proposal will include increased spending or new taxes on residents and industry in the Commonwealth that the House plan sought to avoid.

Chief among the possibilities is a severance tax on natural gas extracted from the Marcellus Shale formation.

Rapp said she would have difficulty supporting a Senate proposal if it included a severance tax, saying it could serve to drive out business and drive up fuel costs for customers.

“Make no mistake, if we initiate a severance tax it’s going to hit the people and home heating bills,” Rapp said. “It always comes back to the citizens of the Commonwealth.”

Rep. Matt Gabler, R-DuBois, among Wednesday’s “yay” votes, disagreed with detractors who said the House proposal lacks genuine investment in public education and pointed to record-setting education funding for the fourth straight year and $10.3 billion allotted for schools — “nearly $400 million higher than the greatest amounts available to schools under the federal stimulus in 2010-11.”

“Obligations placed on us by the federal government, in the form of both increased costs and reduced reimbursements, have made the task of achieving a balanced budget difficult,” Gabler said. “In spite of that, we have put forth a responsible spending plan that does not increase taxes or rely on new debt.”

Rep. Marty Causer, R-Turtlepoint, also registered a “yes” vote Wednesday, saying it remains to be seen whether the House’s proposal — and privatization — survive Senate scrutiny.

“The state budget process is moving forward and is not finalized by any means,” Causer said.