Monday, July 6, 2015

What's Likely to Occur in Pennsylvania Budget Standoff?

 Dan Heyman, Public News Service (PA)

PHOTO: With Gov. Tom Wolf and legislative Republicans far apart on matters like education funding, one economic analyst says the GOP appears to be using a budget crisis they helped create to push for sweeping changes. Photo courtesy Pennsylvania House Archives.
PHOTO: With Gov. Tom Wolf and legislative Republicans far apart on matters like education funding, one economic analyst says the GOP appears to be using a budget crisis they helped create to push for sweeping changes. Photo courtesy Pennsylvania House Archives.
HARRISBURG, Pa. – Analysts predict Pennsylvania's budget standoff will be short and not too damaging – but they warn that could change if either side holds out for extreme ideological positions.

Economist Mark Price, research director at thePennsylvania Budget and Policy Center, says Gov. Tom Wolf's budget and the Republican legislative plans he vetoed are far apart on paper – but he expects the two sides will take a serious approach to negotiating a deal this week.

Price says after deep cuts to public education over the last four years, some steps look like common sense to much of the public.

"There is a strong likelihood it'll be resolved quickly, and it'll be resolved in a way that'll lead to more education funding," he says. "It will likely include a drilling tax to help fund that. The other changes are much more uncertain."

Unlike most gas-producing states, Pennsylvania does not have a gas severance tax. Legislative Republicans have criticized the governor for trying to impose a new tax on a growing industry.

GOP leaders have also said they won't pass a budget that doesn't privatize the under-funded public employee pension system, and they are pushing to sell off state-owned liquor stores.

In Price's view, Republicans appear to be using a budget crisis they helped create to push for big changes they couldn't get with the last governor – even though he was also a Republican. Price says the two sides risk a damaging government shutdown, but he says they'll probably back away from the brink.

"In the short run, the disruption from this kind of disagreement should be fairly small and not important," he says. "Although they should've taken care of this earlier. The question is how long it's going to take the governor and the Republicans to come to some sort of agreement."

The governor has called for a $1 billion in new school funding. The Republican budget includes an $8 million increase. Price adds it also uses a number of one-time accounting measures that would help close the deficit for one year, but make it worse in the future. For his part, Gov. Wolf also wants property tax relief, something the GOP has called for in the past.

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