By Kevin Zwick, Chris Comisac and Christen Smith
Capitolwire
HARRISBURG (Dec. 29) – With some harsh words for Republican leadership, Gov. Tom Wolf vetoed parts of the $29.7 billion GOP-structured budget sent to him last week after his preferred “framework” agreement collapsed, calling the latest proposal “an exercise in stupidity.”
Wolf on Tuesday approved $23.3 billion of the $29.7 billion spending plan, but slashed more than $6 billion spread throughout the budget with a bulk of the cuts coming from the basic education subsidy, state prisons, and medical assistance capitation programs.
He also reduced some of the Legislature’s funding – a roughly $31 million reduction for the Senate, and a $19 million cut for the House – to reflect 2014-15 fiscal year spending levels.
“I’m calling on our legislators to get back to Harrisburg, back to the work they left unfinished,” Wolf said, appearing irritated. “In doing this, I’m expressing the outrage that all of us should feel about the garbage the Republican legislative leaders have tried to dump on us.”
Wolf and top aides said the proposal will provide enough “emergency funding” to allow school districts to open after the holidays, but school districts will only receive six months of basic education subsidy for the current fiscal year.
“We are now at a point where I don’t want to hold the children of Pennsylvania hostage for the inability of the folks here in Harrisburg to get the job done,” said Wolf, explaining why he didn’t fully veto the latest budget proposal as he had done earlier this year.
During a conference call with reporters, Senate Majority Leader Jake Corman, R-Centre, called Wolf’s line-item veto of House Bill 1460 “expected,” but added he was “disappointed on how he did it.”
He also wasn’t happy with what he called “the derogatory comments made about our budget, but yet he [Wolf] signed about 90 percent of the [budget] lines.”
Corman said he’s glad some money is heading out for school districts and human services providers, but suggested there’s still plenty of work to be done.
“I said last week this wasn’t the end of the road, but it’s the fastest way to get money to our schools, and that proved to be true,” said Corman. “Obviously, we’ll relieve a lot of the pressure with the funding going to our schools and human services, which we’ve been concerned about.”
“We’re happy the money is going to the schools now, but we’re certainly prepared to work with the House and the governor to finalize this process,” he said.
House Majority Leader Dave Reed, R-Indiana, said Tuesday the governor’s line item vetoes turned HB 1460’s full-year budget plan into a what resembles a stopgap measure – similar to one he vetoed in September and less than yet another emergency funding proposal he threatened to reject earlier this month – begging the question, “why now?”
Wolf appears to be holding out for the $350 million increase in basic education funding that was part of the framework agreement. When asked if he would accept anything less, he said: “That was the deal we had.”
While he wouldn’t say the compromise framework budget Wolf wants is dead, Corman said it’s pretty clear all five parties are not on the same page with regard to its components.
“This is really a five-party discussion, and I think the problem with the framework is we didn’t have five parties on board, and we need to get all five parties moving in the same direction,” said Corman.
Reed reiterated Tuesday House Republicans aren’t interested in the $30.8 billion spending figure or the new revenues necessary to pay for the added spending (he suggested $30.3 billion is as high as the House GOP would be willing to go without liquor, pension and property tax reforms to the liking of his caucus). House Democrats have said they want more changes to the current pension reform plan under consideration in the House. But Corman said Senate GOP support for the framework and the taxes that would have to be raised to balance that budget is contingent on that pension bill winning House approval as is.
“We need to get to a spend number that all five bodies agree to, as well as the other issues like pension reform,” Corman said. “Apparently we aren’t there yet, but we need to get there.”
And on the pension bill, Corman stated, “We’ve compromised enough” on the bill, making it clear, “This won’t get done without pension reform … it’s a key component to getting this finalized.”
“If we’re going to move forward with that framework, that [pensions] has to be brought back up and passed [in the House], if not, then we have to go in a different direction,” said Corman.
A significant bone of contention Tuesday was the Wolf administration’s claim that HB1460 represents a $95 million cut in education funding.
“This exercise in stupidity actually cuts education funding by $95 million compared to the draconian Corbett budgets,” Wolf said. “It does add a modest amount in basic education funding, but then it takes out over $300 million to be used for school construction.”
As reported by PennLive on Monday, the administration assumes $210 million in education funding increases but then subtracts $305 million due to the line item commonly known as PlanCon (officially titled “Authority Rentals and Sinking Fund Requirements”).
A roughly $5 billion PlanCon bond strategy has been the lynchpin of balancing every budget plan that’s passed the House and Senate over the last six months — and it was a piece of the $30.8 billion framework agreement. CLICK HERE to read the original plan as it was described to Capitolwire on June 26.
PlanCon reform architect Rep. Seth Grove, R-York, said earlier this month the bond strategy hadn’t changed in the six months since. The $5 billion bond would be distributed to school districts statewide who could use the money to pay off existing construction debts, thus freeing up money for other expenses. The roughly $300 million line item would re-appear in the 2016-17 budget as the state’s cost to repay the bond over the next two decades.
Corman also took issue with the governor’s assertions HB1460 would cut education funding by $95 million.
“Clearly that’s inaccurate,” Corman said. “I would have hoped we were well past playing with the numbers.”
“Obviously the PlanCon project is within the Fiscal Code, it’s something the governor has agreed to and it’s something we plan on moving forward with,” explained Corman.
“The governor, I guess, the administration was looking for some talking points,” he added. “But clearly there’s no cut in our budget to education.”
Much of the spending plan Wolf approved Tuesday was similar to the June budget he completely vetoed.
“Today’s line-item veto of the budget bill represents where we should have been in June or July – not December,” said Rep. Matt Gabler, R-Elk, at a press conference with a handful of other House Republicans responding to Wolf’s announcement. No House GOP leadership members were in attendance. “The Legislature is not six months behind on this – our governor is.”
“This should have been done in June,” said Grove.
Wolf also noted the Legislature hasn’t yet sent him funding for the state-related universities – approximately $600 million – and said the budget “doesn’t have enough revenue to leave any room” to increase spending for state-owned universities over 2014-15 spending levels.
Corman agreed that more needs to be done, including the funding for the state-relateds. However, a lot of that remaining budget work is also due, in Corman’s opinion, to Wolf’s decision to veto $3 billion of education funding and zero out funding for much of the state Agriculture Department and many healthcare concerns.
“Most of the administration lines are fine; most of the items he cut deal with the Legislature,” said Corman. “I found that somewhat interesting he didn’t cut evenly across the board.”
Wolf’s vetoes touched big-cost items like basic education, corrections and medical assistance programs, but he also slashed or fully eliminated funding for small-dollar Health Department programs that are usually seen as a budget priority among legislators, including bio-tech research, lupus, tourette syndrome, ALS support services and regional cancer institutes.
“Clearly the governor was punitive against the Legislature, but I expected that,” Corman said. “He’s trying to develop the ability to put pressure on us, to have leverage over us. That was not unexpected.”
“Unfortunately he took it out on some hospitals and things like that just because people in the Legislature supported” those budget lines, Corman said, listing other items, like critical care hospitals, burn centers and neonatal service, that got cut or zeroed out by Wolf.
“Whether the Legislature liked those facilities or not, they perform extremely important healthcare-related [services],” continued Corman. “For him, in the interest of leverage, to zero those out, I think that was unwarranted and disappointing.
“Clearly, we all knew going in that he was going to design his vetoes in a way to put leverage on the Legislature, and he did that.”
Drew Crompton, the Senate GOP’s top lawyer and chief of staff to Senate President Pro Tem Joe Scarnati, R-Jefferson, expressed frustration Wolf’s choice to cut Senate funding further than House funding.
“He went the extra mile to be especially punitive to the Senate of Pennsylvania,” Crompton said. “Quite frankly, our leadership was trying to be helpful.”
Last week, Wolf said the Senate “caved” to the House Republicans “and extreme interests” who he blamed for the inability to get the $30.8 billion budget framework agreement completed.
As to when the effort to finalize the budget process will resume, Corman said, “We’re at the mercy of the House,” noting that all the code bills, other than the tax code bill, are awaiting House approval, as well as the all-important pension reform bill.
Reed said he intends to resume discussions immediately with other legislative leaders and Wolf, but couldn’t commit to a time certain when the House would be ready to move forward on budget-related legislation.
