HARRISBURG, Pa. — Negotiators in Pennsylvania’s nine-day-old budget stalemate signaled that they were having difficulty reaching agreement Sunday on a deal to scrounge more than $2 billion to patch up the state government’s tattered finances.
Closed-door talks in Pennsylvania’s Capitol came a day before Democratic Gov. Tom Wolf’s midnight Monday deadline to make a decision on the main appropriations bill in a $32 billion budget package. Wolf stayed out of sight over the weekend.
With the Legislature led by anti-tax Republican majorities, those discussions have centered on another big expansion of gambling in the nation’s No. 2 commercial casino state and borrowing roughly $1.5 billion against future revenues from Pennsylvania’s share of a landmark 1998 multistate settlement with tobacco companies.
Friction on Sunday revolved around Wolf’s insistence that lawmakers produce $700 million to $800 million in reliable revenue, such as tax increases, to help the state avoid another downgrade to its battered credit rating.
Senate Majority Leader Jake Corman, R-Centre, said the sides were a couple hundred million dollars apart on Sunday night and that a menu of tax increases could include cable TV, movies, bank profits, telephone service and electric service. Republicans put forward an $800 million package that Corman said would involve about $200 million in one-time cash.
“The governor has chosen he wants more recurring revenues, I understand that,” Corman said. “But we think we put a responsible package on the table that would allow us to balance the budget.”
Wolf also has pushed to slap a production tax on drilling in the Marcellus Shale, the natural gas reservoir that made Pennsylvania the nation’s No. 2 natural gas state.
At midnight Monday, the spending bill becomes law without Wolf’s signature. Before then, Wolf can sign it, veto it or strike out some of the spending.
House Majority Leader Dave Reed, R-Indiana, suggested to reporters that Wolf should start thinking about which parts of the spending bill to veto because Republicans were not willing to meet his demands.
“The administration has consistently said they need more revenue than some of the options that we provided and we, basically, at least from a House perspective, reached the extent of what we’re willing to offer,” Reed told reporters Sunday afternoon.
Pennsylvania has struggled with an entrenched post-recession deficit, and credit downgrades in 2012 through 2014 have left it with among the nation’s lowest credit ratings. The $1 billion-plus shortfall in the just-finished fiscal year was state government’s biggest since the recession.
The House and the Senate planned to return Monday after each held a voting session Sunday, largely as a sidelight to the private budget discussions.
Signing the entire appropriations bill — it packs about $31.4 billion for the current fiscal year and $400 million that will go on the books of the last fiscal year — or letting it become law on its own would be unconstitutional without the funding to underwrite it, Reed said.
“I don’t think the responsible thing to do would be just to let that budget become law,” Reed said.
Legislation carrying approximately $600 million in aid to Penn State, Pitt, Temple, Lincoln and Penn awaited the passage of a revenue package.
The fiscal year began July 1. Without a signed budget plan in place, the state has lost some of its spending authority, although the Wolf administration has said it anticipated no program or service interruptions, at least through Monday night.
For the second straight year, the Legislature sent an on-time, bipartisan spending bill to Wolf, but with no plan to pay for parts of it.
Last year, Wolf let the plan become law without his signature when the 10-day signing period expired — despite questions about whether the move was constitutional — and lawmakers delivered a $1.3 billion funding package three days later.