Republicans wary over Wolf-proposed-budget’s silence on cost drivers

Republicans wary over Wolf-proposed-budget’s silence on cost drivers

Author: Jason Gottesman/Tuesday, February 7, 2017/Categories: News and Views

Though less combative than in past years following budget addresses by Gov. Tom Wolf, Republican leaders Tuesday offered their reaction to the governor’s FY 2017-2018 budget address.


Senate Republicans were first up to offer their spin on the governor’s proposed $32.3 billion spending plan, noting their concern that the governor was silent on major budget cost-drivers like pension reform and long-term care where Senate Majority Leader Jake Corman (R-Centre) said the governor “offered nothing to restructure the problem.”


“We could do all the things the governor suggested here today and we’ll be right back here next year looking at a deficit because we have not addressed the public pension problem in Pennsylvania,” said Sen. Corman. “We will take the lead on that as we have in the past and when we come back from Appropriations hearings we will start the process of trying to get a pension bill done.”


Senate President Pro Tempore Joe Scarnati (R-Jefferson) noted while the governor’s address starts budget discussions on a different tone than prior years, the budget must be balanced with cuts and consolidations, but also with a focus on job growth to balance the other side of the ledger.


“The cost-drivers and the public pension reform are a critical part of how we move forward and moving forward with reforming those cost-drivers and making those policy changes and looking at every aspect of the governor’s budget address and what it does to jobs and the economy, because we need to be able to work towards both,” he said.


“At least we are at a better starting point, but we have a long way to go in moving this budget and making sure what we do is in the best interest of working Pennsylvanians and taxpayers.”


Senate Appropriations Chairman Pat Browne (R-Lehigh) noted the governor—in seeking consolidations and efficiencies—has adopted the Republican plan of how to balance a budget in the short term, but that will still require oversight.


“It’s a welcome shift, but it of course requires the Senate Appropriations Committee, the House Appropriations Committee, together with the entire General Assembly to do its due diligence to make sure that it’s real,” he said. “Any proposals of this significance require due diligence and we will do that.”


He noted one question that will need to be answered with regard to the department consolidation is whether it will provide a more efficient, just not bigger, government.


In the House, leaders were similarly pleased to see the governor propose the agency consolidations, but noted—like Sen. Browne—that oversight and other ideas will be in the next budget’s future.


“I think it’s a reality check,” said Speaker Mike Turzai (R-Allegheny). “In many ways he has taken a page out of our playbook for the citizens of our Pennsylvania. I think it will allow budget negotiations to continue in a very positive fashion.”


He added that House Republican priorities like job creation, energy independence, and an economic environment that can support family sustaining jobs will be put forward by members of his caucus going forward.


He also said that there will be a discussion about how to invest in school choice options as part of the education discussion.


Appropriations Committee Majority Chairman Stan Saylor (R-York) said his committee will use the budget hearing process to vet all proposals.


“We really are going to be focusing on restructuring government and creating jobs as we go through the hearings starting in just two weeks that is where we are going to be delving into mostly. Talking about debt reduction, talking about our programs, talking about things that really work for working families,” he said.


“We’ll delve into more details and have for you and the taxpayers of Pennsylvania where we are going as we restructure Pennsylvania government.”


One thing Republican leaders from both caucuses panned Tuesday afternoon was Gov. Wolf’s call for a severance tax from which his budget counts on $293 million in the coming fiscal year.


“We think the impact fee works very, very well. It invests in our local communities that are actually impacted by the drilling themselves, invests in the environmental stewardship grants throughout the Commonwealth, and we’ve always been suspect of the numbers the Budget Secretary has put on a severance tax just given the state of the natural gas industry’s market price right now,” said House Majority Leader Dave Reed (R-Indiana).


“I think it would take a lot of convincing for us to actually believe the number associated with almost $300 million associated with a severance tax along with an impact fee associated with it. There’s a lot of moving parts there, but we have been suspect for a reason and mostly that’s because the natural gas industry just wasn’t where it was six or seven years ago.”


Sen. Corman agreed saying the caucus will not entertain taxes on job creators.


“When you see the natural gas industry reduce its investment in Pennsylvania over the years because of the marketplace, how adding a tax on top of that will incentivize more jobs and incentivize more investment, in Pennsylvania is beyond my comprehension,” he said.


They also had a number of questions about charging municipalities that rely on State Police coverage.


“Again, that’s a proposal that we’ll have to review,” said Sen. Corman. “There’s issues around that, obviously, with whether smaller communities would be able to afford that and what does it provide for them to do that.”


Rep. Reed had stronger words, saying proposals like this are going to be subject to rigorous scrutiny.


“I don’t think it has been ever actually fully vetted as to which communities would be impacted,” he said. “I think that’s one of those areas where there’s a lot of question marks out there.”


House Republicans were also skeptical to raising the minimum wage to $12 per hour, but will instead focus on providing jobs for a broader range of Pennsylvanians.


“We appreciate that every ten to twelve years folks have this discussion in America and across the states…but no neighboring state has a minimum wage over $10, to propose $12 an hour or $15 an hour as House Democrats have proposed is not just realistic in today’s economic times,” said Rep. Reed.


Also discussed by Republican members were ways to leverage more assets out of the state liquor stores, getting out of the business of funding the state workers insurance fund, and other consolidation efforts.


The legislative dig into state fiscal matters begins in earnest on February 21, 2017, when the House and Senate Appropriations Committees begin their annual round of budget hearings with various administrative agencies, stakeholders, and affected parties.