$32B budget would send more to schools, pensions, disabled

By MARC LEVY Markets Associated Press

Pennsylvania lawmakers were poised to approve a $32 billion compromise budget package unveiled Thursday, the second-to-last day of state government's fiscal year, even though they had no plan to pay for it or handle the state's biggest cash shortfall since the recession.

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The bipartisan spending plan carries hundreds of millions of dollars more for schools, pension obligations and services for the intellectually disabled, but demands belt-tightening across state government agencies and in its most expensive program, Medicaid. It also sees savings from a shrinking prisons population.

The Senate Appropriations Committee approved the spending plan hours after details were unveiled, with floor votes planned in both chambers Friday. Lawmakers expected to return to the Capitol next week to figure out how to raise $2 billion-plus to cover a two-year projected shortfall, with anti-tax Republican leaders looking to borrow, expand casino-style gambling offerings or sell more private-sector liquor licenses.

Democrats and some southeastern Pennsylvania Republicans are pressing for a new tax on Marcellus Shale natural gas production in the nation's No. 2 natural gas state. Lawmakers' coming debate over the revenue will take place in the shadow of an entrenched post-recession deficit that has damaged Pennsylvania's credit rating and left it among the lowest of states.

"Everybody better bring their notepad and pencils and tell me what they're for," said Senate President Pro Tempore Joe Scarnati, R-Jefferson. "I'm tired of hearing about what everybody's opposed to. Tell me what you're for."

The spending figure in the just-unveiled budget package falls between what Democratic Gov. Tom Wolf had sought in his February proposal and what the House passed in April, strictly with Republican support. Wolf's administration had warned for weeks that the House bill would squeeze services and force layoffs across state government, but Senate Minority Leader Jay Costa, D-Allegheny, said Thursday night that Democrats were pleased with the final spending plan.

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In a statement, Wolf lauded the plan, saying it "invests more in our schools, protects seniors, creates jobs and builds on our fight to end the heroin epidemic." He also nodded to the coming debate over paying for it, and said he looked forward to lawmakers completing the process with "a long-term, responsible solution to our budget challenges."

The package authorizes an approximately $870 million increase in spending above last year's approved budget of $31.5 billion, or almost 3 percent, including about $400 million being added to the just-ending fiscal year's books.

New spending includes a $100 million boost Wolf sought for public school instruction and operations, or almost 2 percent more, and $30 million more for early-childhood education, a 15 percent increase. Higher education aid is flat.

Hundreds of millions more are going to pension obligations and nearly $200 million more to improve services for adults with intellectual disabilities or autism.

That money would bump pay for the first time in at least five years for people who work with the intellectually disabled, whittle down an emergency waiting list for in-home care services, and bridge a gap in services for students graduating high school.

Meanwhile, the package wipes out House cuts of roughly $50 million to county-run programs — cuts that counties had warned would force property tax increases — and another $50 million cut sought by Wolf to school transportation aid that had been protested by rural school districts, Senate officials said. It also restores a $30 million grant to the University of Pennsylvania's veterinary school, which Wolf had sought to eliminate.

To curb spending, the plan asks Wolf's administration to find savings across its agency administrative budgets and in a Medicaid program that, including federal dollars, costs $30 billion. It does not say how, and Republican lawmakers say it could include cutting reimbursements to insurers that administer much of the program or asking the federal government for waivers to seek cost-sharing from enrollees.

The budget agreement was expected to include legislation to incorporate Wolf's push to merge several agencies. The Department of Corrections and the Pennsylvania Board of Probation and Parole would merge into a new Department of Criminal Justice, over the objections of county prosecutors. And Wolf would get part of the more sweeping merger he had sought, combining the Health and Human Services departments, but keeping separate the departments of Aging and Drug and Alcohol Programs.