Published On: Fri, Dec 18th, 2015

Wolf administration says it has the votes for a tax hike

By Andrew Staub | PA Independent

Anna McCauslin has fought Democrat Gov. Tom Wolf’s proposed taxes increases for almost half a year. But she began to feel a pit in her stomach around 11:30 a.m. Friday, as signs began indicating she waged a losing battle.

The director of policy for the Pennsylvania chapter of Americans for Prosperity, a grassroots conservative group that opposes tax hikes and supports limited government, heard Wolf may have secured enough votes to shepherd a $1.8 billion tax increase through the GOP-controlled state House.

“It’s unbelievable that it’s been almost six months, and this is where we find ourselves,” McCauslin said.

Should the House pass the revenue plan over the weekend — the governor’s office says it has the votes — it will end an almost six-month-long budget impasse that has forced schools to borrow an estimated $900 million and left nonprofits scrambling to stay open.

Andrew Staub/PA Independent

WOLF WIN?: Gov. Tom Wolfs office says it has the votes for a tax package that could end the budget impasse just before Christmas.

“We are confident we have the votes to pass a revenue package and the rest of the budget bills,” Wolf’s press secretary, Jeffrey Sheridan, said in a statement. “We look forward to bringing this impasse to an end so we can fund our schools, balance the budget, begin to fix our deficit and move Pennsylvania forward.”

RELATED: Impasse could close Philly schools

Passing the tax package, which would be used to increase education funding and repair a structural deficit, would mark a partial victory for Wolf, who initially wanted much, much more. It would also mark a defeat for Republican lawmakers who for six months have said the governor’s insistence on higher taxes caused the impasse.

Wolf had reached a budget framework agreement with the four legislative caucuses in November. House Republicans broke from it earlier this month, and the administration painted the caucus — and House Speaker Mike Turzai in particular — as obstructionists keen on destroying a budget deal.

Some House Republicans, though, have characterized themselves as the last remaining firewall between their constituents and a tax increase.

Wolf needs some Republicans to join Democrats to pass the revenue plan, but state Rep. Eli Evankovich, R-Westmoreland, isn’t among them.

“If the votes are present in the General Assembly, I guess it’s a win for the spending establishment and for the governor, but it’s a loss for the people who elected us to come up here and represent them,” he said.

State Rep. Daryl Metcalfe, R-Butler, is also a no-vote. Citing an additional $85 million in so-called walking-around-money buried in the Senate-passed budget, Metcalfe suggested Wolf is using pork-barrel spending to win support.

RELATED: Free-market group targets ‘slush funds’ buried in state budget plan

Sheridan failed to respond to a message seeking comment. He also didn’t respond to a request for information about the tax proposal, which has yet to be publicly aired.

A $30.8 billion budget would increase spending by about 6 percent. Wolf initially proposed a $33.8 billion spending plan that included a mix of tax increase and tax cuts.

Republicans who control the Senate and House handed Wolf a $30.1 billion budget with no tax increases June 30. He vetoed that legislation almost immediately and then struck down an $11 billion stopgap budget in September.

Over the six-month impasse, Republicans have whittled down Wolf’s original ask, said Steve Miskin, a spokesman for House Majority Leader Dave Reed, R-Indiana.

“If it were possible to put together a budget without any revenues, clearly that would have been the best choice,” Miskin said, “but the fact is there was a deficit to close and a compromise was reached. We have divided government.”

Which has led to Wolf getting some of what he wanted while agreeing to modest public pension reform and some changes to the way the state sells wine and spirits — both GOP priorities.

The Senate passed a bill allowing some private retailers to sell limited amounts of wine, but it avoided total privatization. The public pension reform bill would create a hybrid retirement system with elements of a pension and a defined-contribution plan, but it doesn’t do anything to cut into the state’s $60 billion in pension debt, and it doesn’t save as much money as past iterations.

Now, Pennsylvanians are getting “crappy reforms” in exchange for a higher tax bill, McCauslin said.

Americans for Prosperity is running a radio ad urging lawmakers to vote against a tax hike. But if Wolf has the votes he says he does the impasse could end this weekend. A vote could come Saturday or Sunday.

“We are hopeful that within a couple more days a budget will be completed,” said Bill Patton, a spokesman for House Democrats.

If that happens, a tax increase is coming.

State Rep. Stephen Bloom, R-Cumberland, said he’s going to do his best to stop that from occurring.

“If we walk out of here tomorrow having allowed the governor and the minority Democrats in both chambers to secure a $1.8 billion tax increase, then I believe we have — at very best — been an ineffective Republican majority,” he said.

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