[toc]In an unsurprising move, Pennsylvania state Senators adamently rejected the budget proposal recently advanced by the House. To give you an idea of just how much the Senate hated this plan, they rejected it even though the state has literally run out of money.
Very few Senators vote in favor of latest plan
According to Penn Live, only seven Senators voted in favor of the budget proposoal. The House’s budget plan included future borrowing against a tobacco settlement, a $1 billion loan, and raiding other, more robust government funds to cover the $2.2 billion budget shortfall. The plan also earmarked $225 million coming from gambling expansion revenue, including regulated online casinos.
The bill generated hours of debate in the House. It also failed to generate a single Democratic vote. So, it was not surprising that the Senate quickly and resoundingly rejected the proposal.
The House budget bill featured no new taxes, plus left the state $700 million in the hole already for the next fiscal year. Meanwhile, the Senate proposal features natural gas taxes and less future borrowing. It is also a bill endorsed by Gov. Tom Wolf.
What comes next for budget talks?
Since the two legislative groups cannot come to an agreement on a single budgment plan, it is time for more attempts at compromise.
While the reaction to the House plan was not positive, the Senate is willing to take some elements and incorporate them into a compromise.
For example, both groups agree gambling expansion needs to be a part of the final plan. However, what kind of expansion is still causing conflict. Namely, the House wants to allow video gambling terminals, while the Senate does not.
Senators will be more open to some future borrowing, but not as excessively as the House proposes.
The two sides will have an opportunity to try and meet in the middle next week. The House is currently out of session this week, but next week, a committee will try to advance a common plan to solve the budget crisis.
The committee will consist of six people, three from each chamber. The respective chambers’ leadership will appoint these members, who will meet and try to find a middle ground.
Any plan needs approval of at least two Representatives and two Senators.
Committee needs to work quickly
Considering the state is officially out of money and unable to pay their bills, a compromise cannot come soon enough.
On Sept. 15, the state ran out of money. This is not an exaggeration either. The state cannot pay important bills, including those to Medicare and pensions.
The Budget Office spokesperson Michal Abbott issued a statement regarding the state’s financial insolvency:
“As a result, 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.”
This is only the start of the financial woes for the state if the two groups cannot make budget progress next week.