Pennsylvania Governor Prepares New Budget While Still Struggling to Pass This Year's

by | February 9, 2016

By Angela Couloumbis, Harrisburg Bureau

This time last year, talk in the Capitol swirled around how newly elected Gov. Wolf's first budget was going to be bold and controversial.

It was to be an early test of whether the mild-mannered Democratic governor with the polished business resume and the famously unpredictable Republican-dominated legislature could put aside political and policy differences and achieve something.

Few could have predicted just how messy that experiment would get.

Nearly 12 months later, the governor finds himself still wading through a stubborn and mentally exhausting stalemate over his proposed spending priorities for the current fiscal year.

And now he has to unveil a budget for the next one.

On Tuesday, Wolf will address a joint session of the legislature and implore lawmakers to embrace some of the same core ideas he advocated last year: more money for public schools, and a permanent solution to gaping deficits that have plagued the state's budgets for more than half a decade.

And just like last year, he is expected to argue that the only way to fix the state's cash-flow problem -- while also buoying public education, a priority for his administration -- is by making the politically difficult decision of raising the state's sales or personal income taxes.

"We are in a crisis mode," Mary Isenhour, Wolf's chief of staff, said in an interview late last week, describing a state shortfall predicted to grow from $500 million this year to between $1.8 billion and $2.5 billion next year. "For many years, state government has been robbing Peter to pay Paul. And Peter is out of money."

Without a balanced budget that attacks the deficit, she said, "We are going to have to do massive cuts."

Wolf has already started releasing some details of his plan. Last week, he traveled to Reading and Philadelphia to announce his intention to ask for $200 million in additional funding for public schools; and $60 million more for preschool programs.

That money, he stressed, will be on top of the school funding increases he wants -- but still hasn't secured -- for this year.

That first funding boost was part of his tentative deal with GOP leaders on a $30.8 billion budget that unceremoniously blew up days before Christmas.

It derailed, in large part, over disputes on how to fund the increase in spending. Despite the participation of their leaders in negotiating the deal, Republicans in the more conservative-leaning House balked at the eleventh hour because the deal would have required hiking sales or income taxes.

Wolf still expects that pieces of it will stand, namely, the proposed deal to increase public education funding by $350 million in this fiscal year.

That deal is dead, House Majority Leader Dave Reed (R., Indiana) said last week.

"He's got to be realistic," said Reed. "At some point, he's going to have to change or adjust his vision accordingly so we can complete this year's budget first."

Ask anyone in the Capitol what progress has been made to resolve their differences, and the answer is invariably the same: We're working on it.

Complicating matters is a looming election in which all 203 House seats and half the 50 Senate seats are up for grabs. Pushing through a substantial tax increase in an election year will be a heavy political lift.

Rep. Pamela DeLissio (D., Philadelphia) said in an interview last week that as the stalemate dragged on last year, she advocated for a mediator. "You know when people need help with the dialogue," she said.

But she and others said they hope Wolf's budget address this week will lay out, in the starkest of terms, what a refusal to raise significant new revenue could mean: severe cuts, likely in such areas as public education and social services.

"He has to, even more clearly than last time, spell out the choices before us," said Rep. Madeleine Dean (D., Montgomery). "Do we continue the obstructionism or do we finally sit down and decide how to move Pennsylvania forward?"

Rep. John Taylor, a Republican from Philadelphia, said he doesn't want to vote for a tax increase. But he believes that ignoring the need to raise new dollars could have catastrophic consequences for critical state programs.

"If you are an elected official right now in the Pennsylvania legislature, you have one of two bad choices," he said. "Either you are going to have to vote for drastic cuts that are politically disastrous, or tax increases that are politically disastrous.

"It's almost as if leadership has to act as if we don't care about the political consequence," he said. "Because if we don't act like that, the political consequences will envelop us anyway."

(c)2016 The Philadelphia Inquirer