Friday File


May 06, 2016

Budget Stirrings

Like plant stalks poking through May soil, the FY 2016-17 budget process is showing signs of life.

The House passed HB 1999 this week as an appropriate vehicle for an eventual budget deal. This legislative procedure will allow the House and Senate leaders to insert the “real” budget language when the leaders and the Governor reach some agreement. It means that the Senate, which is not likely to dabble in numerous amendments, could consider and return the budget to the House within a few days. It also means that the House could then accept or reject that budget bill “on concurrence” in Senate amendments.

What it all means is that the mechanisms are being put in place for consideration and passage of the budget before the June 30 deadline.

All sides seem determined to avoid the impasse that choked off funding to schools and damaged the Commonwealth’s financial standing last year.

Indeed, Republicans and Democrats have openly agreed that a substantial increase in revenue will be necessary to deal with the nagging structural deficit that Pennsylvania continues to face. This could signal willingness to support some tax package – the most difficult vote that occurs during budget season.

In addition, there seems to be a renewed interest in addressing the largest cost-driver that decision-makers continue to face: pension reform. Insiders are now saying that a revised version of pension reform is likely to pass the House in mid-May. That bill is likely to be returned to the House with Senate amendments as a part of a budget “deal.”

Similarly, look for a House version of limited liquor “privatization” soon.

The sequence of “big ticket” items in order to get to a timely budget enactment looks something like this:  pension reform followed by liquor reform followed by “revenue enhancement” followed by the budget itself.

Given the antics of last year, it is difficult to be optimistic about this all happening in an orderly fashion.

But consider this: those May flowers make it through the dirt every Spring!