State Capitol Update

The General Assembly adjourned last week without passing the state budget. Significant issues between the Senate Republican Majority Leader and the Democratic House, as well as the Governor, remain unresolved. Key among those is the Republican insistence that the amount of state government spending be held in check.

The Governor’s original budget proposal called for $51.5  billion in expenditures.  A portion of that would have come from the state’s rainy day fund (a reserve account). The Republicans have insisted that the expenditure number not exceed $49.9 billion, and that tapping reserves would be fiscally irresponsible.

The House Democrats passed a version of the Governor’s budget trimmed by $900 million on July 14. The Republican Senate then proceeded to strip out the budget language and ultimately not pass a final budget bill before leaving town.

Other key areas of contention that remain include the Democrat proposal for an increase in mass transit spending (which would largely benefit metropolitan areas) and the regulation and taxation of skill games. The impact of the severe budget cuts from the federal government for such programs as Medicaid and food assistance is also being calculated

The House has scheduled its next session for September 22, and the Senate is scheduled for September 8. Both Chambers could be called into session earlier if leaders reach a deal.

It is not unusual for Pennsylvania to go beyond the June 30 fiscal year deadline. Over the years, the courts have ruled that state employees need to continue to be paid (as well as those on public assistance) during budget impasses. The legislative pressure generally begins to ratchet up as the start of the K-12 school year comes closer.