PA House counting on liquor privatization, one-time transfers for budget

By Andrew Staub | PA Independent

HARRISBURG, Pa. — Finally, we’ve got a real, live budget proposal from the General Assembly.

After shuffling around a shell bill that simply serves as a vehicle for the state’s 2014-15 spending plan, Republicans on the House Appropriations Committee have sent a more detailed, $29.1 billion budget proposal to the chamber’s floor.

The committee approved the proposal in a party-line vote — 21-14 — after more than two hours of debate Tuesday.

Lawmakers have until Monday to meet their deadline to pass a budget, and the House could vote on the budget bill as soon as Wednesday. With that in mind, here are a few takeaways from the plan:

Counting on liquor privatization

The House long ago passed a historic plan to phase out the state’s more than 600 liquor stores and end Pennsylvania’s monopoly over hard alcohol. While the state Senate hasn’t endorsed that proposal, House Republicans are still counting on it to balance the budget.

In fact, they’re anticipating it would bring $380 million next year. It’s far from a done deal, even with Gov. Tom Corbett again pushing the Legislature to act.

State Sen. Scott Wagner, R-York, said last week liquor reform was stuck in a “Mexican standoff,” while Erik Arneson, a spokesman for Senate Majority Leader Dominic Pileggi, said Tuesday the chamber isn’t expecting the final iteration of a liquor reform bill to net the revenue the House expects.

That could force lawmakers to consider other options.

“I’m just wondering what the alternative will be if on the off-chance we don’t actually do a liquor privatization around here,” state Rep. Mike Carroll, D-Luzerne, said. “ … but the likelihood is that there’ll have to be some other sources that we’ll have to consider along the way.”

Education funding still a pressure point

No surprise here. Many Democratic lawmakers still have big concerns about education funding. While Corbett in February proposed a $340 million block grant program, that was replaced with a smaller $100 million increase.

Carroll was among the lawmakers who said that wouldn’t be adequate, and several others joined him.

“I have to say, I didn’t think it was possible for anyone to come up with a more harmful plan for our schools that Tom Corbett, and yet regrettably, that’s what we’re faced with (with) this amendment,” said state Rep. Steve Santarsiero, D-Bucks.

While Democrats panned the reduction in education spending, state Rep. Jim Christiana, R-Beaver, said its school districts must reel in “reckless” spending.

There’s no tax increase, but there are millions in one-time transfers

The Independent Fiscal Office’s projection the state will finish the fiscal year more than $570 million in the red fueled talk about a severance tax on the extraction of natural gas, a higher cigarette tax and even a hike to the sales tax. But House Republicans avoided those scenarios.

Instead, the budget bill that cleared the Appropriations Committee will make use of more than $226 million in one-time transfers to help fill the deficit.

State Rep. William Adolph, the Republican chairman of the House Appropriations Committee, said affected agencies won’t have an issue paying their bills next year, even with the transfers.

What else?

The proposal also anticipates pulling in $150 million by reforming the state’s escheats system, $48 million by suspending some tax credits for two years and $75 million from expanding natural gas drilling in state parks and forests, among other strategies.

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