Cracking the Code: These budget bills are where the deals get made

Normally, it’s the big numbers of Pennsylvania’s annual budget debate — whether increasing public school dollars or decreasing business tax rates — that attract the most attention.

But with no new taxes or big spending hikes on the table, many Capitol veterans believe the drama this year could lie in an obscure, but no less critical, part of getting an on-time spending plan onto Gov Tom Wolf’s desk: code bills.

The bills are a package of budget-enabling legislation that effectively serves as the instruction manual for spending the money in the state’s General Fund budget.

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 edit an existing part of state law that govern 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.

Take, for example, a fight over school funding in 2013.

In the budget negotiated that year, 21 of Pennsylvania’s 500 school districts split an additional $30 million in funding distributed through the school code. As LancasterOnline reported, districts weren’t named; instead, the language was crafted so narrowly it could only apply to one place.

The vast majority of the lawmakers whose districts benefited were in leadership positions at the time, WHYY reported.

The practice has continued. LancasterOnline reported last year on millions of extra state dollars that went to school districts in Erie, Scranton, Allentown, and other systems across the state through the budget.

But the small measures included often go beyond money. One hired gun described code bills as “the scariest thing for a lobbyist” because of how easy it is for impactful, far-reaching provisions to be slipped in at the last minute.

Here are other provisions, big and small, that lawmakers have attempted to or successfully inserted into budget season code bills just in the past few years:

• The Senate in 2017 passed a tax code bill that included a severance tax proposal, paired with cuts to environmental oversight. The measure did not reach the governor’s desk.
• Harrisburg Mayor Eric Papenfuse mulled slipping a measure to expand Harrisburg’s taxing authority into the fiscal code last year. It did not succeed.
• In 2018, the state Senate privatized free rides to medical appointments for at least 150,000 Medicaid recipients in a late amendment to the state human services code. Some rural lawmakers hope to delay the change this year.
• The 2017 administrative code closed a loophole that let in-state electricity providers buy out-of-state solar energy to meet renewable energy standards

In 2012, the Republican-controlled Senate inserted language to eliminate a cash assistance program for disabled adults into a packed human services code bill. Gov. Tom Corbett signed the bill into law shortly before the budget deadline.  

Rep. Gene DiGirolamo, R-Bucks, previously told the Capital-Star the proposal “was put together real quick in a couple of days,” without much time to debate its merits. He voted no.

The approach eventually backfired on the GOP.

The state Supreme Court struck down the entire bill in 2018, describing the legislation as a “reanimated zombie” that did not pass constitutional muster.

On the flip side, Senate Republicans have taken the state Department of Environmental Protection to court for failing to change significant state water regulations as directed to in an administrative code bill passed during the protracted budget fight in 2017.

According to Manzo — who worked in the House from 1994 until 2007, when he, along with several other prominent House Democrats, was prosecuted in the “Bonusgate” probe  — legal fights are part of the risk of legislating through code bills.

“It all depends how artful the person with the pen is,” Manzo said.

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.

Often times, these provisions are added at the last minute as part of the rush to meet the June 30 budget deadline. That can raise the ire of rank-and-file members who fear they won’t know what they are voting on.

But Manzo said “that doesn’t happen as much anymore,” following a slew of rule changes to give lawmakers more time to read bills. These days, lawmakers have at least a few hours, if not a day or two, to look at the legislation. In past decades, they might have had just 10 minutes, according to Manzo.

Unlike regular bills, which must be rejected in their entirety, Gov. Tom Wolf has the power to line-item veto the budget appropriations bill — he can pick and choose parts he doesn’t agree with and reject them.

The administration holds that Wolf has the constitutional power to do the same with a code bill. Whether a governor has that authority was left unresolved by Commonwealth Court in 2017, when it ruled that Corbett improperly notified lawmakers of his intention to veto parts of the fiscal code.

In the end, what ends up in the text comes down not to budgetary bean counting, but to the most important legislative math — votes. That’s according to Manzo’s former boss, Democratic ex-Speaker and Capitol power player Bill DeWeese.

“It is impossible to engineer a successful conclusion and a gubernatorial signature” to a budget “without obvious horse-trading,” DeWeese told the Capital-Star. “And it’s been the same since the beginning of the republic.”