Senate Approves Revenue Package; Ball Now In House’s Court
Pennsylvania’s new fiscal year started July 1. Although Governor Tom Wolf let a nearly $32 billion budget bill become law without his signature, there is still much work to do. With the spending plan enacted, lawmakers must come up with $2-plus billion to balance the books and work on legislation necessary to enact the budget (i.e. the Code bills that direct how the dollars are spent). Also held up in the Legislature are measures to provide state funding to Penn State, Pitt, Temple, Lincoln and Penn.
Budget talks have been intense. New revenue options and how much in new, repeating revenues (i.e. taxes) has been a major sticking point.
The state Senate approved a $1.796 billion tax package touted as a step towards fiscal responsibility. That Tax Code package imposes a tax on drilling for natural gas, and would raise or impose new taxes on consumers’ telephone, electric, and gas bills. It also imposes a new tax on consumer fireworks and extends the state’s 6 percent sales tax to third-party sales in online marketplaces (e.g., Amazon, eBay, etc.), and authorizes the borrowing of $1.3 billion against future tobacco settlement payments. The Senate revenue plan also counts on $200 million in revenue from the expansion of gambling that has not been approved and is still being negotiated with the House.
The ball is now in the House chamber’s court. It is not clear yet what the Republican-controlled House chamber will do or when they will return to session. House Republicans have resisted calls for higher taxes and we hear rumblings that they are not okay with the Senate tax package. House members remain on a six hours’ notice to return to Harrisburg. The House is expected to convene its Fall Session on September 11.
The state’s Constitution requires a balanced budget. Without a revenue package, the budget remains out of balance, raising questions about whether the state can legally spend money.