The Sentinel

Budget Impasse Hopefully Nearing End as General Assembly Passes, Sends Final Budget-Related Legislation to Governor’s Desk

October 30, 2017

Lawmakers worked to end the months-long budget impasse last week, as they passed and sent to Gov. Tom Wolf several key bills that are critical to balancing the $32 billion spending plan that was enacted in July. The governor ended up signing some of these bills today.


The first item of business was the Tax Code bill that the House had sent the Senate the week prior. The Senate passed the legislation by a 29-21 vote without making any changes (which Senate Majority Leader Jake Corman, R-Centre, indicated would be the likely scenario before the vote was held). Governor Wolf signed the legislation into law on Oct. 30.


The Tax Code relies almost entirely on borrowing $1.5 billion from the Tobacco Settlement Fund, and $500 million in one-time fund transfers. It also includes new taxes on expanded sales of fireworks and an effort to collect more sales tax from online sales vendors. A recent state Supreme Court decision that no longer requires new provisions in the Tax Code related to net operating loss carryforward deductions is also said to generate a “modest windfall” for the Commonwealth.


The Senate also passed a House-approved Public School Code bill by a 35-15 vote that makes several reforms to the existing teacher evaluation system. The bill – which still awaits Gov. Wolf’s signature - eliminates the “last in, first out” layoff priority that sometimes resulted in qualified, effective teachers losing their job simply because they hadn’t been employed by the school district as long as other teachers. It replaces this system with one that bases furloughs on performance evaluations instead. The PA Chamber has long advocated for this measure because every student deserves an opportunity to experience an inspiring educational environment, which increases their chances at academic success. Last year, the governor vetoed similar legislation due to his objection of the role that standardized test results played in the teacher evaluation process.


The Public School Code also aims to increase by $10 million the amount of money going toward the Educational Improvement Tax Credit program – which the PA Chamber supports as it allows the business community to provide scholarship dollars to students who want to attend schools that best meets their academic needs.  The bill also contains other noteworthy provisions, including opioid education programs and anti-lunch shaming provisions.


The other major element of the budget package – a gaming expansion bill –ended up passing the House in a bipartisan 109-72 vote (the Senate approved the measure on Wednesday in a 31-19 vote). That bill was approved by the governor today, as well. While it was on the legislative agenda, much of the debate centered on provisions regarding the introduction of video gaming terminals to the Commonwealth at truck stops and whether or not the language regarding VGTs was too narrowly defined. According to Capitolwire, opponents of the legislation also criticized what they called an explosion of gambling the bill would trigger, questioned the amount of revenue expected from the bill and lamented the limited amount of time and information made available prior to the chamber’s consideration of the legislation. The gaming expansion measure also aims to legalize iGaming, create 10 satellite slot machine locations (with an option for counties to opt-out of allowing them) and regulate fantasy sports betting – reforms that are expected to generate $239 million in the current budget year and $100 million in recurring revenue in future budget years. In addition, it is expected to provide $25 million each year toward lottery programs that benefit older Pennsylvanians and create more property tax relief to be distributed through Property Tax Relief Fund.


Following the passage of this important package of legislation, House Majority Leader Dave Reed, R-Allegheny, was confident about the General Assembly’s approach and the future economic outlook. “We balanced a budget, we took care of the difficulties from last year’s deficit, we balanced this year and actually looked forward to next year, as well,” he told reporters. “So it was really a three-year budget approach. We’ll see how things turn out. Revenues estimates so far have been positive for this year. Hopefully that trend will continue and decisions will get easier instead of harder.”


Other budget bills that landed on the governor’s desk last week included $600 in additional spending for Pennsylvania’s four state-related universities and the University of Pennsylvania Veterinary School; along with budget-related capital debt authorization bills that provide for infrastructure project itemization and authorization.


Governor Wolf also signed the Administrative Code and the Fiscal Code into law today, which are key pieces to resolving the budget impasse.


The House and Senate now both stand in recess until Monday, Nov. 13.


Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.