The Capitol's hot topic? How long a budget deal will take


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HARRISBURG, Pa. (AP) — It's the talk of the Capitol: How long will it take for Gov. Tom Wolf and the Republican-controlled Legislature to settle on a budget?

For many who rely on state government, it is a very serious matter. Employees, school districts, counties and not-for-profit social service organizations felt the brunt of drawn-out budget stalemates twice in the past 12 years under former Gov. Ed Rendell.

This year, the ingredients for a third such stalemate are at hand: A new Democratic governor with big promises to increase public school aid is facing a large budget gap and a Legislature controlled by Republicans who are betraying no signs that they think a tax increase is necessary.

Wolf said this week he hopes to sign a budget bill before the new fiscal year starts July 1 — but not just any budget bill.

"My key concern is that we do it right, we get a good budget," Wolf told reporters.

If he has a fallback plan in mind, he is not saying.

The governor's Democratic allies in the Legislature say they expect any Wolf fallback plan will draw the line at increased aid to public schools and higher taxes on Pennsylvania's booming natural gas industry. But Senate President Pro Tempore Joe Scarnati suggests that it should not include a tax increase on gas drilling. The timing of a budget agreement will depend on Wolf, he said.

"Could it be done in July? Absolutely," said Scarnati, R-Jefferson. "Could it go on until August or September or October? (It could) if they continue to use the Rendell playbook."

Wolf wants to increase state taxes on income, sales, tobacco, banks and natural gas production to fill a projected budget deficit, boost aid to schools and cut corporate and school property taxes. Republicans are preparing a bare-bones budget that would not increase taxes.

Once July 1 comes and goes without a budget deal, pressure ratchets up.

A 2009 court ruling allows Wolf to keep state employees paid and on the job, relieving one pressure point. But, unless Wolf signs a stop-gap spending bill, billions of dollars would stop flowing to public schools and a broad array of social safety-net providers.

In 2003, during Rendell's freshman fight for more public school aid, the former Philadelphia mayor approved GOP lawmakers' make-do budget bill. But he line-item vetoed $4 billion for public schools and eventually forced what many view as a victory for his agenda. In December, when some school districts finally warned that they had run out of money and could not re-open after the winter holiday, the Legislature approved tax increases on income and cigarettes.

Six years later, facing a recession-driven deficit and Rendell's demand for more public school aid, Republicans agreed to raise cigarette taxes and legalize table games at casinos. Still, by the time Rendell signed a budget bill in October, social service agencies had laid off employees, borrowed money or shut down.

Already, The Forbes Funds in Pittsburgh is arranging a loan program for nonprofit service providers stricken by a budget stalemate. It also is encouraging them to put aside money.

"Sometimes you keep saying, 'It won't happen again,'" said Kate Dewey, president of The Forbes Funds. "And we're saying, 'It may not happen again, but let's be prepared.'"

Politics also could determine which sides makes concessions, and when.

Rep. Mike Sturla, D-Lancaster, insists that Wolf's agenda is publicly popular: property tax cuts, more public school aid and higher taxes on the natural gas industry.

"If Republicans say, 'no, no, no, that's not our agenda, we're going to make you wait until September on that,' well, I think the governor wins," Sturla said.

Steve Crawford, who served as Rendell's legislative secretary and chief of staff, said Wolf's biggest challenge will be to corral Democratic lawmakers' support once he secures an agreement with Republican legislative leaders. Republicans will insist that every Democrat vote for it, Crawford said, to lessen the GOP's political exposure to voting for something unpopular with conservatives, like a tax increase.

"The first thing Republican leaders are going to do is say: 'OK, how many votes do you have? When you have 80 Democrats, come talk to us,'" Crawford said. "They're going to insist that those guys go first."

___

Marc Levy covers politics and government for The Associated Press in Pennsylvania. He can be reached at mlevy@ap.org. Follow him on Twitter at www.twitter.com/timelywriter

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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