Wolf takes dim view of GOP's budget-balancing strategies

By MARC LEVY Markets Associated Press

Democratic Gov. Tom Wolf poured cold water on leading ideas from Republican lawmakers Wednesday to patch up the state's deficit-wracked finances as they wrestle with the state's biggest cash shortfall since the recession.

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Wolf's comments came as top Republican lawmakers try to assemble a budget plan without a tax increase and negotiate a spending plan in private that could require belt-tightening and cuts across state agencies and services.

Time is ticking down: The state government's new fiscal year starts July 1.

Speaking to reporters, Wolf avoided saying that he outright opposes two key Republican ideas: borrowing against future state revenue and legalizing gambling on slot machine-style games in thousands of bars, truck stops and other locations.

Rather, he suggested that such ideas concern him.

Wolf is counting on an extra $250 million in cash from new forms of gambling, but his own Department of Revenue has told lawmakers that allowing gambling in so many new locations would inflict losses on revenue the state gets from the Pennsylvania Lottery and licensed casinos. Just setting up regulatory systems for gambling in bars could take a year or more, the department told lawmakers.

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"I want real revenue, and I want net revenue," Wolf told reporters after appearing at an unrelated public event in the Capitol. "I don't want anything that we do in gaming or gambling to interfere with the revenues that are already in place. If it just cannibalizes and takes from one bucket called gambling to another, the commonwealth isn't doing anything more than it has in the past."

Gambling in bars passed the House earlier this month with bipartisan support, and House Republican leaders have brought it to budget negotiations.

In any case, the Senate has not shown that it would support such a large gambling expansion. Senate Majority Leader Jake Corman, R-Centre, on Wednesday said such a move could be bigger than Pennsylvania's 2004 legalization of up to 14 commercial casinos, and he was "a little nervous about the size and scope" of it.

For their part, Senate Republicans are exploring the idea of borrowing against future state revenues, such as Pennsylvania's annual share of the 1998 multi-state settlement with major tobacco companies.

Borrowing could supply the lion's share of the $2.2 billion in new sources of money that Corman said is necessary to balance a $31.5 billion House Republican spending plan. House Speaker Mike Turzai, R-Allegheny, did not dismiss the borrowing concept on Wednesday, but also said he had not seen a proposal from the Senate GOP.

Asked about borrowing, Wolf pointed out that he had proposed a $1 billion tax package in February that he had touted as closing loopholes and making corporations pay their fair share. It included imposing a tax on Marcellus Shale natural gas production.

"That's what I'm looking for, something that is recurring revenue, not another one-time fix, not another thing that just kicks the budget problem, the deficit problem down the road for another year or two," Wolf said.

Top Republican lawmakers have had nothing positive to say about Wolf's tax package, or his plan to charge municipalities for free state police coverage.

Wednesday was the last voting session of the week for the House and Senate, with lawmakers scheduled to return Monday. House and Senate Republican majority leaders said they planned to meet through the weekend.