PA lawmakers return for budget scramble

By Andrew Staub | PA Independent

Get ready for a June chock full of pension reform, paycheck protection and liquor privatization talks in the Pennsylvania Capitol.

All of those big-ticket items and more — perhaps a severance tax on natural gas extraction? — will be up for discussion when state lawmakers return to Harrisburg on Monday. Still, the most important question will be how those issues fit into the conversation as the General Assembly grapples with a budget that could be off by $1 billion next year.

“The budget is the only big-ticket item that should be on the table,” state Sen. John Yudichak, D-Luzerne, said earlier this month.

May’s revenue numbers are expected to fall as much as $100 million below estimates, leaving the state potentially down $600 million for the current fiscal year. Those woes will spill over to next year’s budget, meaning this June’s round of financial talks could get particularly challenging — especially during an election year.

Republican Gov. Tom Corbett announced a feel-good budget proposal in February, saying he wanted to funnel $387 million more into education and go another year without a tax increase. Since then, the state’s revenue has stagnated, leaving some of those priorities in doubt.

It will certainly make for an interesting month. Here are a few things to watch for as lawmakers charge toward the June 30 budget deadline:

Liquor privatization

While an overall strategy to deal with the budget problem has yet to emerge, House Majority Leader Mike Turzai, R-Allegheny, told the Associated Press he’d like to revisit the idea of privatizing the more than 600 state-owned liquor stores.

The House more than a year ago passed a privatization bill that would phase out the state stores and raise an estimated $1 billion, but lawmakers in the Senate haven’t seemed eager to auction off the state’s alcoholic assets.

Kevin Shivers, Pennsylvania state director for the National Federation of Independent Business, said he heard chatter during Memorial Day weekend that suggested lawmakers are wondering whether it makes sense to keep the state system intact if there’s a shortfall.

The only question, Shivers said, is whether lawmakers have the political will to remove government from the liquor business.

“The real challenge for lawmakers is one of priorities,” he said. “And do they want to limit government and control the rate of growth, and are they willing to take on the issues, the reasons why we have the problem we do?”

While the House has already made its privatization hopes clear, Senate discussions have focused on keeping the state stores while improving convenience — such as by allowing the sale of limited amounts of beer and wine in grocery and convenience stores.

Perhaps a budget hole will bring some consensus between the two chambers.

Pension reform

Corbett has said he wants to defer $170 million in pension payments in the next budget year while pushing for the short-term savings paired with long-term reform.

The budget situation might have torpedoed any short-term plans, but there’s a chance pension reform will move to the forefront in June.

State Rep. Mike Tobash, R-Schuylkill, has put forth a “stacked-hybrid” plan that could save the state $11 billion over the next 30 years, with most savings coming more than 20 years from now.

Tobash wants to get the legislation to Corbett’s desk by the end of the month, but it has already faced criticism from union leaders and House Democrats.

Medicaid expansion

While Corbett waits for the federal government to approve his Healthy PA Medicaid reform plan, one state lawmaker wants to force a vote on Medicaid expansion under the national Affordable Care Act.

State Rep. Pam DeLissio, D-Philadelphia, said last month that — come June — she would introduce a “discharge resolution” to compel a full House vote on the issue.

That’s not likely to succeed with Republicans controlling the chamber, but it probably won’t stop Democratic lawmakers from pushing for expansion, especially considering the federal funding that would come with it. Democrats say the state could save more than $300 million next year with Medicaid expansion.

Corbett contends his plan would save the state $125 million, though that’s in limbo until the federal government makes a decision on his proposal.

Internet gambling

Less than a month after a study found that Pennsylvania could reap millions by allowing Internet gambling, a Senate committee will examine the idea again Tuesday.

There’s not much time for iGaming to gain traction before the budget deadline, and lawmakers have moved slowly in the past when considering gambling initiatives.

Plus, there’s a chance the dismal response to the newly allowed games of chance in taverns will mean lawmakers act even more cautiously this time.

Nevertheless — like any revenue generator — it’s going to get a look. The study from the Legislative Budget and Finance Committee found that tax revenues from iGaming could hit about $70 million in the first year and more than $110 million annually in the years after.

Paycheck protection

This week will probably bring more debate between conservative lawmakers and union leaders, thanks to public hearing about paycheck protection scheduled during Thursday’s House State Government Committee meeting.

The controversial proposal, sponsored by Lancaster County Republican state Rep. Bryan Cutler, would ban the state from deducting union dues, fair-share fees and political money from employees’ paychecks.

Cutler has painted it as a good-government policy after the Bonusgate scandal, in which taxpayer resources were used for political purposes. He hopes it doesn’t get lost in the budget scramble.

“Issues regarding ethics are always important,” Cutler said. “For people to believe in the legislative product that we’re putting forward, I think they have to first believe in the process.”

Union leaders say the legislation is simply meant to cripple organized labor in Pennsylvania.

Vitali still fighting park and forest drilling

Corbett last month signed an executive order that would allow additional natural gas drilling in state parks and forests, as long as it doesn’t disturb the surface.

The plan, Corbett said, could net $75 million next year. Still, it’s drawn heavy resistance from state Rep. Greg Vitali, the Democratic chairman of the House Environmental Resources and Energy Committee. He hopes lawmakers block it during the budget process.

“The key thing the Legislature can do is make it very clear to the governor that this is not the direction that we want to take,” Vitali said.

The idea will be the topic of discussion during a House Democratic Policy Committee meeting Monday.

Staub can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.