Time running out to agree on state budget
The General Assembly reconvenes Monday (today) with only seven days before the current fiscal year ends and the new budget needs to be in place, as mandated by the state constitution. With such a vital deadline looming, the General Assembly and administration should be hard at work, trying to solve these pressing fiscal problems before time runs out. But that’s simply not the case.
Pennsylvania is facing a revenue shortfall of some $1.2 billion, double what Gov. Mark Schweiker predicted in February when he unveiled his 2002-03 spending plan. Tough times mean tough decisions.
But this administration is attempting to whitewash its flaws and failures with creative math and misguided policies. The slight-of-hand accounting maneuvers planned for this budget could leave residents paying an exorbitant price over the long run, with no return on their investments.
Republicans who control the General Assembly and the governor’s office are facing a laundry list of problems but don’t seem to hear the clock ticking loudly in the background.
This budget will be the final chapter of the Ridge-Schweiker administration, and yet their effort to address some major challenges in this spending plan does not make for a very impressive legacy.
Robbing Peter to pay for Paul’s education
As school districts continue to struggle, so far Republicans are offering only a modest funding increase, except in Philadelphia. The city’s school district is slated for a $75 million gift, as promised by the governor, while the other school districts would be forced to split $33 million.
The Philadelphia school subsidy would jump 11.7 percent. At the same time, the governor’s budget provides only a one- percent boost in basic education subsidies for all other school districts, raising the demand on property taxes that already have increased $1.7 billion under Republicans’ seven-year watch.
There are rumors that Republican leaders may try to present an appearance of a larger increase by pointing to alleged savings in the budget, and call this “the equivalent” of a bigger funding boost.
But without an increase in the basic subsidy line item, such semantics will do little to help schools pay their bills.
Blowing smoke rings with tobacco funds
When Act 77 of 2001 took effect, the GOP boasted loudly and often that “every dollar received in the national tobacco settlement will be spent to make Pennsylvanians healthier.”
But the governor’s proposed 2002-03 spending plan would siphon $182 million in tobacco funds to balance the General Fund budget, making that earlier pledge seem a bit disingenuous.
Act 77 makes it clear that investing money from the Tobacco Settlement Fund for anything other than its designated purpose requires the governor to present “A detailing spending proposal with a request for an appropriation” to the legislature, and that plan requires a two-thirds vote.
Sifting $182 million from tobacco programs to balance the General Fund is a clear contradiction of state law.
That $182 million would be enough to provide year-round health insurance coverage for 40,000 Pennsylvanians, restore basic insurance coverage for 7,500 disabled workers or provide 4,000 seniors with the support services they need to stay out of a nursing home.
Rainy Day Fund plan all wet
Tapping the Rainy Day Fund to offset the massive budget shortfall brought on by misguided Republican proposals will require a two-thirds vote by the General Assembly, a standard that Republicans might subvert to get what they want.
That money belongs to Pennsylvanians, and it should be used to their benefit.
The administration treats this money as its own savings account, using it to fill holes rather than accomplish goals. Pennsylvanians should get some return on their investment.
Taxing situation for residents
Republicans are proposing the largest tax increase in a decade. A $6-per-ton tipping fee at state landfills would generate about $150 million yearly.
Pennsylvania’s 31-cents-per-pack cigarette tax would jump to $1 and a 40 percent tax would be imposed on chewing tobacco. The cigarette tax would generate $617 million annually; the smokeless tobacco surcharge would bring in $11.5 million each year.
Increasing the Capital Stock and Franchise Tax to disrupt its anticipated slowdown would pull in an additional $91 million. Pennsylvania will decouple itself from a federal tax cut to ensure that corporations and other businesses don’t benefit and still have to pay $245 million here next year.
All of these items are outstanding as we head into the final week of budget negotiations. Each of these issues will have a serious impact on the lives of Pennsylvanians, yet it appears as though all of the decisions will be made in haste and in secret. Even as they prepare to raise taxes by $1.1 billion, they want to empty the state’s Rainy Day Fund. And in the end, residents still face rising property taxes, students still suffer from inequities in school funding, seniors will pay too much for their prescriptions and patients still lack access high-quality health care.
With the state poised to choose a new governor in 2002, the remainder of the legislative session is critical in setting the agenda for change. This makes the work of House Democrats all the more important.
We plan to continue our steady push for plans to lower property taxes, make health care more affordable, raise the minimum wage, attract good-paying jobs for our skilled workforce and expand the state’s commitment to basic and higher education. The fact is that the Republican way simply isn’t working. And in this final week before a budget is due, it appears as though the GOP isn’t working either.
Rep. Bill DeWeese of Waynesburg is the House Minority Leader; Rep. Mike Veon is the House Minority Whip.