Budget framework’s foundation crumbles; next steps continue to evolve

Budget framework’s foundation crumbles; next steps continue to evolve

Author: Jason Gottesman/Saturday, December 19, 2015/Categories: News and Views

The budget framework that seemed so close to passing now now seems a lot like Elvis: after suffering a very public and unflattering death Saturday after its lynchpin—public pension reform—failed in the House by an overwhelming 52-149 margin, some still think it might be alive.

Public pension reform—as many had suspected—was going to be the deciding factor Saturday as to whether the optimism about a budget being completed in short order was more reality than wishful thinking.

Asked about the still uncertain revenue package that was being worked on to support the $30.788 spending plan as part of the framework, House Majority Chairman Bill Adolph (R-Delaware) noted the importance of the vote on public pension reform.

“I think this pension bill is a very important piece of what we’re trying to accomplish here and I’ll be able to discuss where we’re going with the other parts of the agreement after this bill is debated and, hopefully, passes the House,” he said.

The bill, however, did not pass the House. All House Democrats and 66 Republicans voted against the bill.

House Democrats stood firm Saturday in the conviction that they never agreed to put up votes for the pension bill as part of the budget framework agreement.

“Our caucus has never been in agreement on pensions; we’ve agreed with the rest of the framework, [but] pensions have never been part of the framework,” said House Appropriations Committee Minority Chairman Joe Markosek (D-Allegheny). “Our leader, Frank Dermody, indicates that he never agreed to the pensions. This isn’t part of the framework, it’s a side issue.”

Gov. Tom Wolf had their back Saturday afternoon, speaking after the pension reform plan failed to pass.

“It’s my understanding that Republicans were going to pass that,” he said.

Republicans who voted against the pension reform plan spoke about how they felt it did not do enough in the way of true reform.

Rep. John McGinnis (R-Blair) said the plan will continue the over 4,371 day trend of underfunding Pennsylvania’s pension systems.

“By underfunding our pension system, we steal from our children and children not yet born,” he said. “We do this because we in elected office are addicts. Our drug of choice is public debt, even the kind forbidden by our constitution.”

Another Republican House member voting against the plan, Rep. Eli Evankovich (R-Westmoreland), said he wanted to see a plan that would completely eliminate the defined benefit plan and bring state pension more in line with what is offered in the private sector.

“We need to have a pension reform proposal that would put new employees into a system that is much more like the private sector,” he said. “The fact of the matter is [Senate Bill] 1071 was hastily put together, there are provisions in it that don’t agree with one another.”

After the vote, the Capitol went into a solemn tizzy of trying to figure how to move forward with a spending plan.

“We said from the very beginning we were not going to look at additional revenue sources until we address the number one cost-driver for the state and our local school districts and the number one thing driving up property taxes across the state, which is public pension reform,” said House Majority Leader Dave Reed (R-Indiana).

“It would be our intention to work on a stopgap proposal to fund government until such time that people understand the need to actually get a permanent government in place that funds core services, but also addresses the major cost drivers in the state as well.”

While the House initially was going to have the Appropriations Committee consider a stopgap proposal on Saturday after the pension vote, those plans were scuttled after House Republicans decided to take time to reassess their options.

One of those options may be a full-year spending plan with no revenues, as Senate Majority Leader Jake Corman (R-Centre) told reporters.

“Obviously, it’s very disappointing, but we have been very clear we will not be doing any new revenues for a budget without pension reform,” he said. “Since the House—apparently for the moment has killed public pension reform—we will wait for the House to pass us a budget, a 12-month budget that does not include taxes.”

Others were still holding out hope for the rest of the budget framework—at this point just the increased revenues and $30.788 billion spending plan—with or without pension or alcohol sales reform.

“Pensions is not a budget issue, it was inserted into the framework and we accepted that understanding, but we need to get a budget passed,” said House Democratic spokesperson Bill Patton. “The budget is still active, it’s ready to be voted on relatively soon and that’s our goal.”

Gov. Wolf was also optimistic Saturday afternoon that the budget could still be passed with new revenues that he says are crucial to balancing the budget.

“We cannot slide back on our commitment to our schools. We cannot slide back on our commitment to a truly balanced budget. We cannot slide back on our commitment to a full year budget. Let me be clear. A stopgap is not the answer. We need a full year budget," he said at an afternoon press conference. “Let’s get back to work. All of us. Let’s get this done now.”

As legislative leaders continue to develop how to move forward with the next steps of the budget process, the House will hold non-voting session on Sunday with an eye toward returning at 11:00 a.m. on Monday.

The Senate stands at a 6-hour call to return to session, but has not scheduled any additional voting session days.

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