HARRISBURG, Pa. (AP) — Pennsylvania Gov. Tom Wolf and state lawmakers are embarking on their busiest time: June’s haggling and budgeting weeks that are very different this year from all others in memory, with billions of additional dollars to distribute.
It’s a particularly unusual place for a state that’s been largely mired in deficits since the Great Recession and grapples with a shrinking workforce and rapidly growing elderly population.
Of course, there is no shortage of requests for money.
“To me, it should be easy, but it boils down to – and I’ll be honest – when everyone has money, they want to spend every last dollar,” the chairman of the appropriations committee said. House, Stan Saylor, R-York.
Assembling a spending plan for the fiscal year beginning July 1 will take place in the shadow of partisan fights over abortion rights, gun violence and proposed constitutional amendments that Republicans are waving as a avenue of policy-making around Wolf’s veto pen.
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Wolf, a Democrat serving his final year in office, kicked off the budget season in February with a $43.7 billion proposal in the Republican-controlled Legislature. Its dominant feature is a request for about $1.8 billion, or about one-fifth more, for teaching, running, and special education in public schools. The aggressive demand crowns a feature of his tenure: a campaign to eliminate the deep funding disparities between the poorest and wealthiest public school districts.
How much Republican lawmakers are willing to approve could determine how much Wolf is willing to accept GOP budget priorities.
Other major Wolf proposals include using federal coronavirus aid to send $2,000 checks to households earning less than $80,000 a year — an idea that didn’t sit well with Republicans — and a $200 million scholarship program to bolster the state’s declining public university system.
Since taking office in 2015, Wolf has pushed to reduce Pennsylvania’s net corporate tax rate – one of the highest in the nation – but with structural changes to crack down on tax evasion that are likely to be taxed. opposed the Pennsylvania Chamber of Commerce and Industry.
This year, the chamber and Wolf are optimistic about a compromise.
Wolf’s office says his plans include a “historic opportunity to make Pennsylvania a better place to live and work.”
Republican leaders in the House and Senate were working on a joint counterproposal over the weekend and agreed to send more money to public schools. But not nearly to the level that Wolf wants.
They preach restraint, worrying about projections that the economy is heading for a slowdown.
State bank accounts are now overflowing with — by some estimates — $12 billion in reserves and surpluses, boosted by inflation and an economy fueled by federal pandemic grants.
It’s a revenue “bubble,” said Rep. Jesse Topper, R-Bedford, vice chairman of the House Appropriations Committee.
“It’s unprecedented and it’s not sustainable,” Topper said. “So how are we going to use this money in a way that really helps set a good course for the future when the inevitable rough seas approach?”
A few billion in remaining federal coronavirus aid must be spent by the end of 2024 and lawmakers expect to commit it all this month. Water and sewer projects, state lands and businesses affected by the pandemic will likely benefit.
Meanwhile, several billions in state reserves will be needed to support spending next year.
There are other major demands on the state.
Nursing homes are warning of further closings without an increase in the long-stalled Medicaid reimbursement rate.
The counties’ No. 1 priority is to win the restoration of decade-old cuts to state aid for mental health services — a growing need that has been brought to light by the COVID-19 pandemic and the mass shootings.
Meanwhile, the difficulty in finding workers to care for children, the elderly and people with disabilities is prompting budget officials to consider more subsidies for these professions.
Saylor said his goal was to keep at least $5 billion in reserve, “or the next governor is going to have a very tough time.”
In many ways, the billions of dollars in extra cash are making lawmakers open to things they’ve rejected for years.
Wolf’s office and lawmakers are considering ways to remove the band-aids — such as borrowing and late payments — they have applied to state finances during lean times.
The National Federation of Independent Businesses, for years, has sought to improve the way its members issue sales tax receipts and loosen limits on purchase spend. This year, the organization’s Pennsylvania state director, Greg Moreland, is more optimistic than ever.
“I’m going to be pretty disappointed to be quite honest if we don’t see something big in the budget this year for small businesses,” Moreland said. ” The time has come. Revenues look good. They can no longer use this as an excuse. »
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