HARRISBURG — The ugly, closed-door conflict over Pennsylvania’s 100-day-late budget again lurched into public view Wednesday as state House Democrats moved a spending plan similar to one already rejected by the GOP-led state Senate.
State House leaders said the plan would spend about $50.3 billion, a 5% increase primarily targeted at K-12 education and Medicaid.
Their Republican counterparts in the state Senate, encouraged by an increasingly conservative membership, have so far insisted on funding state government at its current level: $47.6 billion. Any further spending, they argue, endangers the state’s fiscal future absent cuts or new revenue.
County governments and social service providers have warned lawmakers that the impasse is putting them in precarious financial situations. Still, state Senate Majority Leader Joe Pittman (R., Indiana) indicated that Wednesday’s actions will not bring a deal any closer.
“The rhetoric of today,” Pittman said at a news conference, “has taken this budgetary process — as cumbersome and as difficult as it's been — steps backward.”
It’s a seemingly irreconcilable disagreement, which both sides acknowledged in public comments on Wednesday.
Democrats on the key state House Appropriations Committee passed the plan without support from Republicans, who said they hadn’t had enough time to review its revenue proposals. Chair Jordan Harris (D., Philadelphia) responded, “It's 100 days. This has to stop.”
“The governor wanted $51.6 billion,” Harris said of Gov. Josh Shapiro’s initial budget proposal. “We came down off of that, and went to $50.6. We came down off that, and now we're at $50.25 billion. Hell, we were OK at $49.999 [billion] if the Senate could get the votes — they could not. Time is up. We’ve got to pass a budget.”
The bill passed the state House 105-98 with the backing of all Democrats and three Republicans around 5 p.m. The state Senate had adjourned earlier that afternoon. Pittman said the chamber wouldn't return until there is “a reasonable proposal to put in front of members of our caucus.”
Added Shapiro in remarks to the reporters Wednesday evening: "What the House did today represents real compromise. It is ridiculous that the Senate can't get its act together and pass a budget.”
Legislative Democrats say blame for the impasse lies singularly with state Senate Republicans, who have remained committed to essentially flat-funding the budget despite inflation and cost increases for public services like Medicaid.
In return for more spending, state House Majority Leader Matt Bradford (D., Montgomery) said he and his caucus were willing to compromise on issues like alternatives to public schools or energy policy, even if it angered some of his colleagues.
“We know we're not getting everything we want,” Bradford said at a news conference Wednesday. “We break hearts every day in this caucus, but we know we have divided government.”
However, Bradford said he expected that same standard from state Senate Republicans.
He declined to get into specifics about what trade-offs he’d agree to, but added that if legislative leaders weren't willing to compromise, then they “shouldn't be in leadership.”
State Senate Republicans have pressed the lower chamber to pass legislation maintaining current spending levels, which would release billions of dollars in stalled state payments. Then, the chambers could restart negotiations on new spending on things like education or Medicaid.
"If I were the queen of the world, I would just give them all their money, as we're sitting here trying to make decisions and not agreeing," state Senate President Pro Tempore Kim Ward (R., Westmoreland) said on the chamber floor Wednesday morning.
Schools, nonprofits, counties, and businesses that receive state money have missed billions in payments and are under increasing stress as the impasse drags into its fourth month.
“They need to lock themselves in a room and not come out until it's done,” said Janet Garvey, who manages S&S Pools and Spas, a small business near Scranton that provides brine tanks to PennDOT to help the agency clear state roads of snow and ice. The company is currently owed $37,000.
Deep disagreements over the state’s fiscal future are at the heart of this year’s budget impasse. While Pennsylvania has almost $11 billion in cash reserves, they have shrunk in recent years as state spending has outstripped annual tax revenue.
“We can pass a budget if we let the Democrats and the governor have their tax increase,” Ward told a Philadelphia radio show last week.
Neither Gov. Josh Shapiro nor state House Democrats have proposed broad tax hikes, like sales or income tax increases. They do want to regulate and tax recreational cannabis and slot-like skill games, though these are more limited taxes that Republicans are generally also open to.
State Senate Republicans rejected the former idea and face deep internal divisions on the latter, which has kept it precariously placed on the edge of the negotiating table.
Responding on the state Senate floor to the allegation that Democrats want tax hikes, Minority Leader Jay Costa (D., Allegheny) was succinct: “That is total bs.”
Talks between a handful of top legislative leaders and their closest staff have been ongoing since the June 30 deadline came and went.
But despite public promises from those same lawmakers that a deal is close, and a handful of concessions from Democrats on transit and spending, no white smoke has emerged from those closed-door meetings.
In fact, in recent weeks, the temperature has gotten so cold that three lobbyists privately speculated to Spotlight PA that a deal might not come until at least December.
That would be bad news for people like Steve Brady. The Williamsport resident runs Covation Center, a nonprofit incubator and coworking space that has received money from the state to run seminars and workshops to help individuals start their own businesses.
So far, it’s been a ringing success. He and his two employees put on regular boot camps. Some are aimed at entrepreneurs who’ve made it a few years and want a leg up; others teach artists that “profit is not a bad word.”
But without state funding, his shoestring budget of roughly $250,000 is even slimmer than usual.
Brady got his landlord to temporarily halve his rent while also slashing hours and tapping a line of credit. He said the nonprofit is about halfway toward exhausting its credit, and plans to pay it off slowly as it searches for new donors.
But still, he said, it is incumbent on legislators to cut a deal to end the pain.
“It’s brinksmanship, not leadership, that we’re seeing,” he said, adding that when rank-and-file legislators “point fingers at leadership, all I can say is: You elected them.”