HARRISBURG, Pa. (AP) - Democratic Gov. Tom Wolf said Wednesday he was optimistic about getting a good budget agreement and that his administration was acting legally in waving through a budget that lacked the tax collections to sustain it for the entire fiscal year, the second time in two years.
This year, however, is different than last year, when lawmakers remained in Harrisburg and negotiators hammered out a revenue deal within two days after an unbalanced budget bill became law.
Lawmakers this week were sent home to their districts and officials had no progress toward a deal to report Wednesday, the 12th day of a budget stalemate.
In his first public appearance since letting a nearly $32 billion budget bill become law without his signature at midnight Monday, Wolf reiterated to reporters that he was optimistic that a revenue deal would get done.
Wolf refused to discuss details of negotiations around a $2 billion-plus revenue plan said to be necessary to fully fund a bipartisan budget plan, and he brushed aside questions about why he was optimistic and how an unbalanced budget could affect government operations.
His administration acknowledged that there is no case law that suggests that letting an unbalanced budget bill become law is legal, but Wolf maintained that he believes it is on solid legal ground.
“I’m not the attorney, but we are taking a close look at what we can do constitutionally and I’m very comfortable that we’re doing the right thing,” Wolf told reporters.
The Wolf administration suggested that the state constitution makes the Legislature, not the governor, responsible for ensuring that spending bills are funded, and that the governor and state treasurer have significant authority to ensure that spending does not exceed revenue.
Talks had urgency leading up to Monday, when negotiators said the sides were close to an agreement, and then collapsed. A spokesman for House Majority Leader Dave Reed, R-Indiana, said there had been no discussions Wednesday.
House Republican leaders were at odds with Wolf, Democratic lawmakers and Senate Republican leaders over Wolf’s pursuit of a $700 million to $800 million tax package, an amount he deemed to be big enough to avoid a downgrade to Pennsylvania’s bruised credit rating.
House Republicans had offered a tax package less than half that size, negotiators said.
The state was put on notice last week by Standard and Poor’s that it faces another credit downgrade if it passes a budget that relies on optimistic assumptions or one-time cash sources.
Reed was the only caucus leader to protest Wolf’s move to let the budget bill become law. Wolf should have used his line-item veto power to strike enough spending from the budget bill to ensure it balanced with the state’s existing tax collections, Reed said.
Asked Tuesday if the budget bill was unconstitutional, Reed said “that’ll be for the courts to decide.”
As of Wednesday, there no word of any lawsuit to block spending under the two-day-old budget law.
But without a revenue agreement, Wolf will need to put money in reserve, Democratic lawmakers said.
“He’s going to have to use budgetary reserves,” House Minority Leader Frank Dermody, D-Allegheny, said Monday. “You can’t spend what you don’t have, what you haven’t raised and what you haven’t provided for in real, recurring revenue that is acceptable.”
Tax increases under discussion had included basic cable service, movie tickets, bank profits, telephone service and electric service.
Otherwise, the revenue package was to rely primarily on borrowing and involve another big expansion of casino gambling in the nation’s No. 2 commercial casino state.
The scale of long-term borrowing being eyed to prop up the state’s general operations is unheard of, say current and former state officials.
Hung up on budget negotiations is roughly $140 million in casino revenue that flows annually to counties and municipalities that host casinos. Lawmakers aim to revive a mandate struck down by the state Supreme Court last year.
Also stuck were measures carrying approximately $600 million in aid to Penn State, Pitt, Temple, Lincoln and Penn.
Meanwhile, lawmakers had wrangled over hundreds of pages of budget-related legislation that included open disputes about House Republican efforts to add a work requirement to Medicaid and a premium on Medicaid services for higher-earning families with severely disabled children.
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