Budget Bill Becomes Law as Legislators Continue to Negotiate Revenues

From PA Chamber of Business & Industry

Update as of Tuesday, July 11: Gov. Wolf allowed the state budget bill to become law by letting the deadline pass without signing the bill. Lawmakers continue to negotiate a revenue plan this week in order to balance the budget. 

Tonight at midnight is the deadline for Gov. Tom Wolf to take action on H.B. 218, the nearly $32 billion General Appropriations that lawmakers sent him on June 30. The state Capitol was largely quiet last week as legislative leaders continued to negotiate the details of a revenue package to pay for the spending plan. House lawmakers returned to session on Friday and the Senate returned on Saturday, with both chambers convening through the weekend, though little progress was made. In fact, on Sunday the governor rejected a revenue plan that legislative leaders floated his way. “It wasn’t enough,” Senate Majority Leader Jake Corman, R-Centre, explained to Capitolwire about the $2.2 billion revenue package that included about $1.4 billion in borrowing and $800 million in recurring and non-recurring revenues.  

With the governor supposedly holding out for a “couple hundred million dollars more” in additional spending, session is scheduled every day this week until all four caucuses and the administration can agree on a revenue plan. In terms of gaming expansion, it now appears unlikely that the final agreement will include video gaming terminals. Corman told reporters that the gaming provisions are now mostly agreed to, with satellite casinos (smaller gaming venues for which existing casinos would have a first option to bid on licenses), internet gambling run by casinos and fantasy sports betting are being negotiated. Also, while the Senate has seemed uninterested in agreeing to additional liquor reforms, they are now entertaining legislation that would allow beer distributors to become one-stop shops of wine, liquor and beer products in the state’s more rural areas, which liquor privatization supporters say are underserved by the state’s system of liquor stores (a reform that would net about $50 million).

On Thursday, it was announced that the governor’s proposal to merge four state agencies into a Department of Health and Human Services will NOT include the Pennsylvania Departments of Aging or Drug and Alcohol Programs. Gov. Wolf had initially suggested that these agencies, in addition to the Departments of Health and Human Services be combined as part of a larger consolidation plan to help the Commonwealth save $2 billion. Lawmakers cited concerns about the short timeframe associated with the move in the midst of an opioid epidemic as the reason why they moved away from the plan as presented. According to a story in the Pittsburgh Post-Gazette, although H.B. 218 includes savings from combining the Departments of Health and Human Services, that merger must still be approved by legislation. A timeline for when that would happen is unclear.

It’s worth noting that the governor’s midnight deadline on H.B. 218 is only a deadline if he wants the revenue plan to be fully agreed-to before taking action on the bill. Or, history could repeat itself and he could do what he did last year and allow the bill to become law without his signature because the necessary revenues weren’t yet approved. In 2016, lawmakers debated revenue sources for two additional days after the spending bill officially became law.