Pa. budget doesn’t raise taxes or bail out industries hit by the coronavirus

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HARRISBURG — The Pennsylvania legislature has passed a spending plan that avoids tax increases and major cuts, and relies on about $1.3 billion in coronavirus relief aid to balance the books.

The package approved Friday includes no major surprises — and no bailout for restaurants and other industries that have lobbied for what they say is a desperately needed influx of cash. Republican leaders justified using federal aid money for the budget, rather than for direct assistance, saying it would pay the salaries of state-employed public health and safety workers on the front lines of the coronavirus pandemic.

Lawmakers in May approved a partial, stopgap budget amid uncertainty about how COVID-19 would impact state finances. The new plan funds the final seven months of the fiscal year, bringing the total operating budget through June 2021 to $36.5 billion — a roughly 4% spending increase compared to the previous year.

Gov. Tom Wolf intends to sign the plan.

“COVID-19 has left Pennsylvania in a difficult financial situation, and this budget protects against furloughs and deep cuts to critical programs,” Wolf’s spokesperson, Lyndsay Kensinger, said in a statement. “The governor will continue to advocate for federal funding to support recovery efforts at the state and local level, including additional funding for Pennsylvania municipalities and the restaurant industry. We need our federal leaders to step up and provide Americans with the support they desperately need.”

House lawmakers voted 104-97 to approve the main budget bill and 108-92 to approve the enabling fiscal code, which provides spending instructions, late Friday.

The House floor was closed to most members during the vote. A spokesperson for Majority Leader Kerry Benninghoff, (R., Centre), said lawmakers were told to vote by proxy and leave the Capitol.

The reason was believed to be related to possible COVID-19 cases, sources told Spotlight PA. A member of the House announced late Thursday he had tested positive for the coronavirus, leading another lawmaker to file an official complaint with the Department of Health alleging unsafe working conditions. Throughout the pandemic, some GOP lawmakers have refused to wear masks.

The Senate voted 31-18 to approve the main budget bill just before 8 p.m. Friday. Several Democrats objected, arguing public transportation and education would not receive enough funding, and that lawmakers should not use $1.3 billion in remaining CARES Act money to fund state government.

“We should take no pleasure in MacGyvering a state budget by stealing funds that were meant for pandemic relief,” said Sen. Tim Kearney (D., Delaware).

Facing a multibillion-dollar deficit, Republican lawmakers said they had little choice but to use the remaining relief money for the budget. The plan also relies on $2 billion from the federal government for enhanced medical and social service program payments, plus $531 million in transfers from special state funds.

Relying on all of that one-time money could create big challenges for next year’s state budget.

Lawmakers in the Senate earlier Friday voted 33-16 to approve the fiscal code bill, which contains a provision less about finances and seemingly aimed at Democratic Lt. Gov. John Fetterman.

Fetterman’s office has a prime location: a second-floor balcony, underneath the Capitol’s iconic dome, and he has hung LGBTQ pride flags there, as well as one with a cannabis leaf.

The provision directs the Department of General Services — which oversees state-owned buildings — to ensure that no flag other than the U.S. flag, the Pennsylvania flag, or one allowed under state law is flown over or on Capitol grounds.

Jason Gottesman, a spokesperson for the House Republicans, said Friday the caucus worked with Wolf’s administration on the flag language. He said the measure “provides for uniformity and decorum for what is displayed on the outside of the Capitol.”

A spokesperson for Senate Majority Leader Jake Corman, (R., Centre), likewise said “every provision in the bill” was agreed to by Wolf.

Fetterman posted on Twitter that he would stop displaying flags when lawmakers legalize cannabis and provide discrimination protections for members of the LGBTQ community — measures that have stalled in the GOP-controlled legislature.

“It’s kinda flattering that they changed Pennsylvania law just for me,” he wrote.

The legislation also has a special provision targeted at Harrisburg. In 2018, Pennsylvania allowed the city to exit a state program for financially distressed municipalities, called Act 47, while letting it maintain some of the program’s benefits: five more years to keep elevated tax levels. The code bill extends Harrisburg’s exception even further.

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