It’s Budget Week: Here are five, essential things to know | Monday Morning Coffee

June 24, 2019 10:39 am

Good Monday Morning, Fellow Seekers.

All right, here we are. Today is Monday, June 24, 2019. And after a whole lot of build-up, we’re now in the final, six days of the 2018-19 fiscal year.

And the budget gears are now finally grinding to life, with votes beginning this week, with an eye toward getting a finished spending plan onto Gov. Tom Wolf’s desk before we toast another Fiscal New Year at 12:01 a.m. a week from today.

More astute readers will recall that Wolf has proposed a $34.1 billion spending plan for the fiscal year that begins July 1. It’s an increase from current, approved spending of $32.7 billion. As our friends at the AP note, “the increase largely would go toward early childhood education, public schools and growing costs for health care, pensions and debt.”

House Majority Leader Bryan Cutler’s office set the budgetary table on Friday, sending out a briefing memo sketching out the very busy week to come. We’re reproducing it in full below so that you have some idea of what you’re in for this week:

“The House is back in session this week and expected to vote on the 2019-20 Pennsylvania budget. Meetings and discussions between the House, Senate and Administration will continue through the weekend with a vote on a spending plan and related code bills anticipated the first few days of the week. House Republicans remain committed to growing the Rainy Day Fund, successfully funding our legislative priorities this session, and ensuring any increase in education funding is noticed in the classrooms. You will find an outline of anticipated votes and committee meetings below. Appropriations Committee meetings are not listed but are anticipated at the call of the chair each day. Daily calendars and committee schedules are very much subject to change as budget plans come together. Calendar and budget-related updates will arrive in your email.”

In other words, the only constant is, well, change. But that’s pretty standard in the frenetic week that’s ahead.

But because we’re a full-service kind of newsletter, we’re going to run down the top five issues confronting the Democratic Wolf administration and the Republican-controlled General Assembly as we head into end game.

An SEIU activist rallies for a $15/hr. minimum wage, which was one of the policies that F&M researchers polled in their most recent public opinion survey. (Stephen Melkisethian/Flickr Commons)

1. The Minimum Wage Debate:

The Bottom Line: A top priority for Wolf and his Democratic allies in the General Assembly, the debate over the minimum wage may be the marquee issue of the week.

What You Need to Know: Wolf wants to increase the state’s current wage, now $7.25 an hour, to $12 an hour by July and then to $15 by 2025. If approved, it would be the first such increase in a decade. Last week, however, a top House Republican said a wage hike, the first since 2009, wasn’t on the table. Senate Republicans said they were still open to talks. And in Philadelphia, Wolf told us he was open to a deal.

The nonpartisan Independent Fiscal Office, which provides financial analysis to the General Assembly, estimates that the initial increase would mean higher wages for more than 1 million jobs. Wages for these workers would collectively rise $3.5 billion, while an estimated 34,000 jobs would be lost.

A poll from Franklin & Marshall College found that 69 percent of Pennsylvania voters support raising the minimum wage to $12 an hour.

The House and Senate are able to draft and introduce their own spending bills, which means Senate lawmakers may advance legislation with a minimum wage increase even if the lower chamber doesn’t. Still, the same bill must pass both chambers by a simple majority.

Get Smart Fast: The Capital-Star’s Sarah Anne Hughes deftly ran down the wage debate in this June 14 piece.

Pat Albright repurposes a sign to protest the elimination of General Assistance. (Photo by Sarah Anne Hughes)

2. The Debate over General Assistance.

The Bottom Line: Gov. Tom Wolf and the Democrats want to preserve a state program that provides de minimis cash payments to the disabled and those who struggle with addiction. Republicans want to kill it.

What You Need to Know: Former GOP Gov. Tom Corbett and the Republican-controlled General Assembly killed General Assistance in 2012. In 2018, the state Supreme Court reinstated the program, ruling the legislative process that led to its elimination was unconstitutionally flawed. It serves about 11,000 people statewide.

The GOP-controlled House voted to kill the program two weeks ago. House Appropriations Committee Chairman Stan Saylor, R-York, wrote in a memo to colleagues questioning how the Wolf administration intended to pay for the program, PennLive reported.

Wolf, anticipating another push to eliminate it, suggested in January reallocating $50 million to housing support.

The compromise didn’t sit well with advocates for the poor, who argued people in dire straits need access to some cash to get by.

“While it only provides a small amount of assistance, the GA benefit often makes the difference between homelessness and being able to rent a room,” a March letter to lawmakers signed by dozens of organizations and service providers reads. “Our clients also use GA for Medicaid prescription copayments, deodorant, toilet paper, trips to the laundromat, or winter coats.”

Get Smart Fast: The Capital-Star’s Sarah Anne Hughes explains the debate here.

Photo via pxHere

3. The Debate over the EITC.

The Bottom Line: House Speaker Mike Turzai, R-Allegheny, successfully pushed through a $100 million expansion of Pennsylvania’s Educational Improvement Tax Credit, which provides tax credits to businesses that donate to private and religious schools’ scholarship funds. Gov. Tom Wolf vetoed the bill.

What You Need to Know:  Pennsylvania’s Educational Improvement Tax Credit program provides up to $110 million per year in tax credits to businesses that donate to K-12 scholarship funds. Under the current program guidelines, a family that makes $100,608 per year can receive an EITC scholarship for their child.As the Capital-Star previously reported, it’s possible that some expansion of the tax credit program could be included in this year’s budget.

In a statement, Turzai called the idea that public schools are neglected “disingenuous.”

“What we have neglected to provide is adequate support for those families who are looking for an alternative choice,” Turzai said.

“House Bill 800 [the expansion bill] was a statement of our conviction that parents, grandparents and other guardians know best what the right learning environment is for each of their children,” Turzai continued. “I am immensely disappointed that the governor has left those parents empty-handed through this veto.”

In his veto message, Wolf said the program “lacks proper accountability and oversight, and little is known about the educational outcomes of students participating in the program due to a reporting loophole in the current law. Even less is known about the scholarship organizations that retain up to twenty percent of each dollar that is supposed to pass through them and are subsidized heavily by taxpayers. Additionally, House Bill 800 seeks to increase the maximum annual household income limit to $95,000, further deserting the program’s original core principle.”

Wolf also said he was “deeply concerned by the drastic escalation of the cost of this tax credit program.  Initially, the annual cost of the tax credit program will be enlarged by $100 million. Clearly, this is a considerable amount of revenue. Then, there are the automatic increases to the total amount of the program. According to the Department of Revenue, the amount of General Fund revenue that will be lost over the next five years on account of this bill is over $650 million. This is a staggering sum in a relatively short period of time without a single dedicated revenue source.”

Get Smart Fast: The Capital-Star’s Elizabeth Hardison explains who donates to the program and how it’s used here.

Democratic legislators gather around Gov. Tom Wolf at a Capitol press conference. (Capital-Star photo by Stephen Caruso)

4. The Code Bill Debate.

The Bottom Line: The annual budget debate is about way more than the ones and zeroes that end up in the final spending bill. In addition to approving the 2019-20 General Fund Budget, lawmakers also approve about a half-dozen “Code Bills” which effectively serve as the instruction manual for how that money is spent.

What You Need to Know:  Lawmakers amend all sorts of state codes — tax, education, and human services, to name a few — during the June budget season. At times, these bills are used as depositories for lawmaker priorities that have failed to move through the regular legislative process.Each bill edits an existing part of state law that governs spending in their given area. If, for example, lawmakers launch a new workforce development program in high schools, the education code must tell the Department of Education how to fund it.

The biggie is the fiscal code, a bill that dictates how each state department and agency can spend their funding.

“The true sort of bargaining and horse-trading comes at the code table,” Michael Manzo, a former senior House Democratic staffer who now works as a lobbyist, told the Capital-Star.

Changes to the bills often end up in court, as was the case in 2012, when the Republican-controlled Senate inserted language to eliminate a cash assistance program for disabled adults into a packed human services code bill. Then-GOP Gov. Tom Corbett signed the bill into law shortly before the budget deadline. The state Supreme Court tossed the law in 2018.

According to Manzo, legal fights are part of the risk of legislating through code bills.

This budget season, Capitol insiders have whispered about everything from the stalled minimum wage increase or a nuclear bailout, to the vetoed private school scholarship tax credit expansion, finding their way into one of the lengthy, dense bills.

Get Smart Fast: This piece by the Capital-Star’s Stephen Caruso has all you need to know about this seemingly arcane, but very important, debate.

Former Pa. Gov. Tom Ridge (WikiMedia Commons)

5. Saving for a Rainy Day (Fund).

The Bottom Line: Thanks to booming tax collections, Pennsylvania will finish the 2018-19 fiscal year about $910 million ahead of projections. Gov. Tom Wolfsays he wants to take what’s left of that money after expenses and deposit it into Pennsylvania’s Budgetary Reserve Fund. The account is popularly known as The Rainy Day Fund.

What You Need to Know: As WITF-FM’s Katie Meyer reports, the state will be left with around $162 million after expenses. And Wolf, with the support of Republicans, says he doesn’t want to spend the money.

Which, of course, doesn’t mean that his fellow Democrats disagree with him. Some want to channel some money, about $125 million, into a fund for school repairs. Democrats have also proposed channeling about $10 million into security grants for houses of worship. Still another proposal calls for handing property tax breaks to homeowners.

Get Smart Fast: Meyer’s piece is a good read on where things are right now. You can also check out our analysis of where things stand here.

WikiMedia Commons

Our Stuff.
The state Senate Judiciary Committee kicks off a couple marathon days of hearings on probation and parole reform on Monday and Tuesday, Elizabeth Hardison reports.

Sarah Anne Hughes looks at how the debate over general assistance became a ‘Faustian Dilemma.’

Opinion Contributor Mark O’Keefe looks at the difficult road to yes on marijuana legalization.

(Dsw4/WikiMedia Commons)

The Inquirer
 explains how the debate over election reform and voting machines has become such a hot topic with Pennsylvania lawmakers.
PennLive looks at the push to reform the state’s teacher evaluation system. While we’re at it, our Elizabeth Hardison has a pretty good take on the issue as well.
The Post-Gazette goes deep on the struggles of daily life in the Mon Valley.
Supporters gathered by the score to support an Allegheny County church targeted in an alleged bomb plot, The Tribune-Review reports.
There are fresh calls for gun control in the wake of a mass shooting outside an Allentown nightclub, The Morning Call reports.

Here’s your #Harrisburg Instagram of the Day.

Former Pa. Congressman Joe Sestak is seeking the Democratic nomination for president for some reason. WHYY-FM has the story.
U.S. Sen. Pat Toomey, R-Pa., is praising President Donald Trump’sapproach to Iran, WESA-FM reports.
BillyPenn holds its annual Billies Awards show to honor ‘awesome Philadelphians’ on June 26.
PoliticsPA has the past week’s winners and losers in state politics.
In some states, the teenaged children of anti-vax parents can get their own reports.
Politico looks at where the Democratic 2020 candidates stand on 50 key issues.
President Donald Trump has called for bipartisan compromise on immigration – but hasn’t said what he’ll supportRoll Call reports.

What Goes On.
The House and Senate convene at 1 p.m. today.
11 a.m., Main Rotunda: To mark the 100th anniversary of Women’s Suffrage, members of the public can again ‘ratify’ the 19th Amendment by signing posters of it.
12 p.m., Harrisburg Hilton: Pennsylvania Press Club luncheon featuring Pardons Secretary Brandon Flood.
12 p.m., 8E-A East Wing: Sens. Tom Killion and Andy Dinniman, joined by ‘Downton Abbey’ star Leslie Nicol, talk animal welfare issues.
12:30 p.m., Main Rotunda: Event calling for ‘drivers licenses for all.’ We have no idea what that is, nor how it would work.

Gov. Tom Wolf 
heads to Pittsburgh for an 11:30 a.m. with Attorney General Josh Shapiro to talk about a new development in the ongoing UPMC/Highmark divorce.

You Say It’s Your Birthday Dept.
Have a birthday you want celebrated in front of thousands of our subscribers? Hit us up at [email protected].

Heavy Rotation.
Here’s a smooth, summer-y groove to get you going. It’s Frank Ocean and Calvin Harriswith ‘Slide.’

Monday’s Gratuitous Baseball Link.
 got crushed, 13-3, by Seattle on Sunday afternoon. Ugh. The Os are 22-56 with this latest defeat.

And now you’re up to date. 

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.