Senate rejects latest House proposal
The legislative ping-pong of House vs. Senate proposals on how to fund the Pennsylvanian budget deficit continued Wednesday when the Senate rejected the House’s latest proposal, which reportedly included future borrowing against a tobacco settlement, a $1 billion loan, raiding other government funds to cover the $2.2 billion budget shortfall, and plans to raise $225 million from expanded gambling in the state (it now transpires that this included legalising online gambling and DFS).
The lack of a consensus has put the state under financial stress, as witnessed by a statement from Budget Office spokesperson Michael Abbott, who said on September 15 that as a result of the continued lack of a properly funded budget:
“Treasury will today delay $1.169 billion in payments to managed care providers for medical assistance services. The commonwealth will be unable to make these important payments for at least a week, which will likely force many of these entities to have to borrow money, an expense they can charge back to the taxpayers. On Monday, the commonwealth will also have to delay a $581 million payment for the state share of pension obligations to the Pennsylvania School Employees Retirement System.”
The rejection of the House proposal, which was put forward with a marked lack of Democratic Party support, is the latest in a series of proposals and rejections between the Senate and the House.
Although there is some agreement on expanding gambling to generate more tax revenue, there are strong differences of opinion regarding video gaming terminals in pubs and clubs (which the House Republicans continue to favour).
Senators also pointed out that House proposal left $700 million unfunded and a problem for fiscal 2018-19.
Compromise is now the priority if a full blown state financial and ratings crisis is to be avoided. Aside from (mostly) agreeing on gambling expansion, the Senate is reportedly amenable to some borrowing to plug the deficit gap, although not on the scale envisaged by the House.
The administration will be hoping that a spirit of compromise is present next week when a committee comprised of an equal number of members from both houses will try to find common ground, with a carrying vote of a minimum of two House Representatives and two Senators.
