New Castle News


June 27, 2014

Our Opinion: State House passes meaningless measure

NEW CASTLE — The Pennsylvania House has approved a $29.1 billion budget that includes no tax increase.

The plan shifts some funds, eliminates various tax breaks and counts the privatization of state liquor stores as key ways to close a $1.7 billion hole in state finances.

So what does this mean for Pennsylvanians? Probably not much.

This is one of those measures that gives politicians the chance to put on a show without crafting practical leadership. The plan passed 110-93, almost completely along party lines with the Republican majority supporting it. The package was approved just two days after it was cobbled together.

And while Republicans also have control of the Senate (albeit by a narrower margin), the expectation is that the House budget is dead on arrival in the upper chamber of the Legislature.

The reasons are varied, but a key issue is liquor privatization. Several top Republican leaders in the Senate oppose flat-out privatization and are pursuing different reforms.

The House budget basically counts the revenue from the selling of liquor licenses, but there isn’t really a mechanism for having that happen. It’s theoretical revenue.

What this budget does is give Republicans and Democrats in the House the opportunity to go on record for their constituencies. They will defend or condemn the package, all while knowing that it’s not for real.

Now the Senate will get its chance. With the clock ticking and the state technically required to have a budget in place by the end of the month, perhaps senators will forego a show budget and instead focus on a measure capable of receiving majority support in both chambers. Whatever is crafted ultimately will require at least some Democratic support in order to pass.

And then there’s the governor. Tom Corbett has essentially thrown down the gauntlet related to the budget. While there is talk of tax increases in Harrisburg (particularly when it comes to shale gas and tobacco), Corbett has said he will not even entertain such talk until there is a plan in place to revise the state’s pension and liquor systems.

These are two pretty big stands for the governor to take, considering these issues have been kicked around Harrisburg for years without anything near a resolution.

Corbett’s current plan for pensions is a hybrid system of sorts, where current and retired employees will keep their pensions. But new employees would have defined contribution plans that won’t require the same level of taxpayer support.

It’s far from clear whether this proposal can make it through the Legislature. And liquor privatization also remains unlikely.

So we’re not sure how all of this will play out. There are opportunities for compromise and progress on key issues, but it’s likely to be a long, hot summer in Harrisburg.

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