Pennsylvania’s House of Representatives passed late last night a financial plan that aims at closing a $2.2-billion gap in the state’s budget for the current financial year. As expected, the plan was only supported by House Republicans, but given the fact the caucus holds the majority in the state Legislature’s lower chamber, enough positive votes were cast.
The Keystone State has entered the third month of an unprecedented budget impasse and Gov. Tom Wolf has already warned lawmakers that his administration is running out of options for finding the finances needed to cover Pennsylvania’s bills. The state’s top official told local media that he found the House’s plan “irresponsible”. However, he expressed hopes that House and Senate lawmakers will agree on an adequate budget deficit plan by Monday.
Gov. Wolf has previously said that Pennsylvania would not be able to pay its due starting from Friday. However, the governor revealed on Wednesday that they have secured enough finances for the state to cover its bills through Monday.
The House’s Borrowing Plan
Reports that the House GOP caucus was working on its own version of a budget deficit plan emerged earlier in September, even before the Legislature officially returned from its summer recess. The House Republicans first introduced a plan that was the exact opposite of a package previously introduced and approved by the Senate. It scrapped a proposal that would see the state borrow a certain amount of money in exchange for future revenue contributions under the 1998 multistate agreement with the nation’s tobacco companies.
The House GOPs’ original plan also did not include provisions for statewide gambling expansion that would, among other things, see the legalization of online gambling and daily fantasy sports. House lawmakers instead proposed that funds for closing the budget gap could be siphoned from dormant accounts, ones not included in this year’s budget. Some of those accounts contain money for public transport, economic development and protection of the environment.
That initial plan was attacked by Gov. Wolf, Senators, and even by a number of House Representatives, mainly ones from the chamber’s Democratic caucus. House Republicans eventually agreed on compromise that culminated in last night’s passage.
The final House GOP plan includes borrowing provisions, under which the state could borrow around $1 billion from the tobacco settlement, use $600 million from different accounts, and potentially expand its casino industry in a bid to secure additional tax revenue.
The plan will now be handed to the Senate where it will be reviewed and voted on. It is not likely to be passed in its current form, given the opposition Senators and Gov. Wolf have already expressed.
However, the fact that the House eventually compromised on the inclusion of a casino provision may bode well for the state’s gambling expansion effort, which spans several years back.
