Democrats hold election stock heading into '14 budget battle
HARRISBURG - Democratic lawmakers are already out front with proposals to address the state's difficult fiscal outlook a month away from Gov. Tom Corbett's budget address.
Pennsylvania faces an $839 million hole out of a $28 billion budget due primarily to costs for public pensions and medical assistance outpacing anticipated tax revenue growth. Plugging the hole will be especially challenging in an election year when the governor and most lawmakers are seeking re-election.
Budget Secretary Charles Zogby said that broad-based hikes in state taxes and a severance tax on natural gas production won't be considered by the governor. Nor is Corbett interested in making cuts to education and social service programs in fiscal 2014-15, he added.
But Zogby said other options will be considered along the way to producing a balanced budget by the June 30 deadline. The law enacted last November legalizing several small games of chance for taverns is expected to generate millions of dollars in new revenue for state coffers.
Democrats are the minority caucus in both the House and Senate, so obtaining the necessary support for their revenue proposals is an uphill climb.
But they go into this budget debate with an advantage not usually present in other years. Democratic lawmakers should find an echo chamber for their proposals with eight candidates running for the party's gubernatorial nomination in the May primary. Instead of budget debate being confined to legislative chambers, the gubernatorial candidates will likely seize on at least some of these ideas as they discuss what they would do to tackle the state's recurring fiscal problems.
Many of the ideas offered by Democratic lawmakers aren't new; they've been in circulation since at least the lengthy budget stalemate in 2009.
These include suspending a long-term phase out of state capital stock and franchise tax, a levy on the value of corporate stocks to yield an estimated $728 million, according to the House Democratic Appropriations Committee.
House Democrats want to revive a debate over closing the Delaware loophole on business taxes. They urge requiring corporations and their subsidies to file as a single company in order to bring in an estimated $165 million. A law enacted last year narrows the scope of the loophole by requiring businesses, even if headquartered in other states, to pay taxes on profits.
Both caucuses suggest a tax on smokeless tobacco products and large cigars. Pennsylvania is one of the few states without a tax on smokeless tobacco.
Both caucuses favor steps to modernize the state liquor stores to generate more revenue from liquor sales. These include increasing Sunday sales, allowing flexible pricing and increasing fees and fines.
But LCB modernization is not what House Majority Leader Mike Turzai, R-28, Pittsburgh, a strong advocate of divestiture, has in mind for 2014.
(Robert Swift is Harrisburg bureau chief for Times-Shamrock Communications newspapers. Email: firstname.lastname@example.org.)