PA Week in Review: Late budget possible as Corbett waits on pension reform

By PA Independent Staff

Another week has passed without pension reform, liquor reform or significant advances in dealing with the state’s budget.

While lawmakers expect the action to heat up next week – when they start a schedule of eight straight session days – we’re taking a look back at this week in Harrisburg even if the most notable development is what didn’t happen.

On-time budget out the window?

Gov. Tom Corbett made waves this week by suggesting that he would refuse to sign a state budget unless lawmakers also pass a bill to overhaul the state’s public sector pensions, which face a $50 billion unfunded liability, even if it requires staying in session past the June 30 budget deadline.

“We need to get this done right, rather than quickly,” Corbett said at a Tuesday news conference.

It’s a bit of a strong move from Corbett, who has made on-time budgets an important goal for his administration and a centerpiece of his re-election campaign.

The budget is no easy task by itself – particularly in a year like this one where the state is $1.4 billion in the red.

The pension bill may be an even tougher sell. Democrats are unanimously opposed to it and neither Republican-controlled chamber of the General Assembly has yet to vote on the bill Corbett favors, which would reduce benefits for future state workers and public school employees to save $11 billion over 30 years.

And the bill, by state Rep. Mike Tobash, R-Schuylkill, does nothing to address the biggest problem facing the pension plans: the fact that lawmakers have underfunded them for more than a decade, and aim to continue doing the same.

Despite budget struggles, Legislature sitting on big cash

Pennsylvania might be facing a two-year deficit of $1.4 billion, but not everybody is hurting. In fact, the state Legislature and its various departments and agencies are in pretty good shape.

Pennsylvania lawmakers had a reserve fund of more than $153 million as of June 30, 2013, according to an audit report released Wednesday. At the close of the last fiscal year, the state House had $71.8 million stashed away, while the state Senate had $50.2 million.

The big question is how the reserve could be used, especially with the Independent Fiscal Office anticipating the state will finish the current fiscal year more than $570 million in the red.

While there’s been no decision yet on how the reserve might be used, House GOP spokesman Steve Miskin said it’s not a slush fund, but rather a safety net in case of a budget stalemate.

“It’s basically so that a governor cannot extort the Legislature,” Miskin said.

Gene Stilp, a Harrisburg activist turned state House candidate, believes there are better uses — such as using the reserve to deal with a revenue shortfall, which he said would reduce the burden on taxpayers.

“Sure the Legislature may have to go without bread and water for a little bit — excuse me, would have to go without wine and cheese for a little while and cake — but that’s OK because it would make them work harder,” he said.

Liquor reform stuck in ‘Mexican standoff’

Liquor reformed languished again in the state Senate this week, and one lawmaker had a guess as to why.

“It’s too many personalities — too many personalities and too many special interest groups that want this and want that,” state Sen. Scott Wagner, R-York, said. “It’s like a Mexican standoff.”

While the state House passed a historic privatization bill last year that would phase out the state’s more than 600 liquor stores, the Senate has been looking at other options, such as allowing consumers to buy up to three six-packs at grocery stores and allowing limited direct wine shipments

It’s a dogged issue largely because reforming the system has far-ranging effects, said Amy Christie, executive director of the Pennsylvania Tavern Association.

While Christie’s organization wants to preserve its members’ business investments, privatization also would impact the Pennsylvania Liquor Control Board, wine and spirit brokers and the labor union representing state store employees.

And throw the already privatized beer industry into the mix when talking about overhauling alcohol sales and that pulls in everything from the behemoth brewing companies such as MillerCoors to small craft brewers, Christie said.

“There are so many parts to the industry and the PLCB that many do not realize,” she said.

‘Mug club’ discounts poised for comeback

There was at least some good news for beer aficionados.

The state House passed a bill Monday that would allow bars to offer discounts on food and malt or brewed beverages to patrons who are part of a club or group program offered by the establishment.

Commonly called “mug clubs,” the programs have been around for years. While offering exclusive tastes of new craft beer, T-shirts and other perks, some of them had even offered members discounts on brews, but that turned out to be a party foul under the state’s liquor code.

“Sometimes what you think would be OK turns out is not in Pennsylvania,” Christie said.

If the Senate agrees with the House, that could change soon, much to the joy of mug club members.