Spending plan for Pa. budget passes House, still requires Senate approval

HARRISBURG, Pa. (AP) — A $32.7 billion spending package for Pennsylvania's approaching fiscal year began speeding through the state Legislature on Wednesday with little public debate, a stark change from the first three budgets hashed out by Democratic Gov. Tom Wolf and the House and Senate's huge Republican majorities.

The centerpiece of the no-new-taxes plan unveiled just a day earlier won overwhelming House approval, 188-10. It was negotiated behind closed doors by Republican majority leaders with Wolf, and was slated for a Senate vote on Friday.

The new fiscal year begins July 1.

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The lack of a public fight is a reversal from the first three budgets under Wolf, when partisan disagreements over how to plug huge deficits dragged budget acrimony deep into the fiscal year or prompted Wolf to allow spending bills to become law without his signature.

With a November election looming, Wolf — who is running for a second term — had floated a relatively modest budget proposal and lawmakers were eager to get out of the Capitol.

Sen. Vincent Hughes, D-Philadelphia, said new school funding in the budget package helps reach one of Wolf's first-term goals, to resolve a deep budget-balancing cut in state aid dealt to public schools and universities in 2011 under then-Republican Gov. Tom Corbett.

"We're finally closing the hole created by Gov. Corbett and his billion-dollar cut," said Hughes, the ranking Democrat on the Senate Appropriations Committee.

Still, Hughes said the budget won't fix long-standing inadequacies in public school funding.

"That's still a major issue that's got to get addressed," Hughes said.

The plan holds the line on state taxes, and increases spending by about $700 million through the state's main bank account, or slightly over 2 percent above the current year's enacted budget of $32 billion.

The increase goes largely to public schools, social services, pensions and prisons. It also creates a $60 million off-budget grant program for school safety that lawmakers say is still being written into legislation to set guidelines for how the money can be distributed and used.

Wolf appeared to get most of the spending he had sought in his February proposal, including more money to expand high-demand computer and industrial skills training in high schools and colleges.

Republicans, meanwhile, rejected Wolf's overtures for a fourth straight year for a severance tax on Marcellus Shale natural gas drilling and his request for municipalities without a full-time police force to start paying for a portion of the state police coverage they receive.

Some details of the budget package remained unclear Wednesday.

The governor's office and Appropriations Committee officials had not disclosed certain elements of the just-unveiled package, including precisely how the state's massive Medicaid programs would be funded.

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Critics say the use of off-budget dollars to foot Medicaid costs masks the true increase in state spending in the state's operating account, called the general fund.

"A lot of the growth is off-budget, in what's called the shadow budget, and it's not accounted for in the general fund," said Nathan Benefield of the Harrisburg-based Commonwealth Foundation, a free-market think tank.

The budget package leaves questions for next year.

House officials say the package will tap one-time cash sources to underwrite about $800 million in Medicaid costs, potentially creating a funding gap in a year.

Meanwhile, the state faces rising borrowing costs in the coming years after issuing bonds for school construction projects and backfilling last year's $2.2 billion deficit, largely by borrowing.

State officials, however, say rosier projections of tax collections in the coming year could pick up those burdens.