Governor Vetoes Emergency Funding

Member Group : PA Manufacturers' Assn.

Governor Tom Wolf vetoed funding approved by the General Assembly to rescue social services, school funding, and other programs stranded by Wolf’s state government shutdown. Three months into the fiscal year, the governor clings to his position that he will sign nothing but a complete, final budget plan. Anything short of that is a "stunt", he says. Upon vetoing, he said that he could not approve the stopgap plan in order to "keep the pressure up," essentially holding hostages for now 91 days and counting.

If he continues to offer the Republicans the veneer of a compromise as he did recently on public pension reform and liquor privatization, it could be another 91 days. House Majority Leader Dave Reed (R-Indiana) and Senate Majority Jake Corman (R-Centre) left a meeting with the governor Monday saying too many unanswered questions exist regarding the governor’s recent liquor and pension proposals. More rudimentary sticking points about a final spending plan remain as well.

"The only thing we agree on is that we are starting from a $1.2 billion spending deficit," said one legislative source close to the talks. "But even that figure gets shaky sometimes."

The public’s perception of who shoulders the blame, lawmakers or the governor, is shifting, and not in the governor’s favor. Numerous newspaper editorial boards not only saw through the governor’s recent offer on liquor and pensions, but apparently were less than thrilled with his theatrics in calling them "historic reforms," then huffing when he didn’t get an immediate response from lawmakers.

Wolf told the press: "I put that on the table today and what did I get in return? Nothing. I got
nothing on severance tax. Nothing. I got nothing on education. Nothing. I got nothing on property tax and I got nothing on how we’re going to actually balance this budget."

More than a month ago he teased the Republicans by referring to their plan to trade real pension reform for more education funding as a "good offer," and then took 28 day to reject it. Republican legislative leaders didn’t get 28 minutes before he fielded the aforementioned press conference.

Reactions from around the Commonwealth to what’s happening with the budget:

• "Wolf dredged up what can only be called Reform Lite". The online news service went on to characterize the liquor proposal and pension plan as "non-starters."

• Pittsburgh Post Gazette: "The (liquor) plan is a loser. It privatizes nothing."

• Bucks County Courier Times: "Now that we’ve gotten an unvarnished look at those ‘historic’ reforms, here’s our take: phony-baloney ‘reforms’ that create the appearance of movement for a Democratic governor."

• LancasterOnline: "Forget his proposal last week to offer a long-term lease to manage the state liquor stories; private firms would bid on a contract to manage the system, which would stay under state ownership."

"Clearly, the opinion beyond the Capitol is starting to view this governor in a very negative light," said PMA President David N. Taylor. "With Governor Wolf’s action to deliberately keep schools and human service programs unfunded, public perception will shift drastically – and deservedly so. This is pure obstructionism by the governor."

Experts agree. "As the one responsible for delivering the services the governor ultimately takes the blame when the services start being threatened," said G. Terry Madonna, Professor of Public Affairs and Director of the Center for Politics and Public Affairs at Franklin and Marshall College.

The governor’s offer to lease the administration of the liquor system to a private firm merely adds another layer on a government-owned system. And the stacked-hybrid public pension plan he offered fails to target the real cost drivers in the hemorrhaging plans that cover state workers (SERS), and public school employees (PSERS). The irony is that under his proposal, the pension plans will continue to engulf General Fund dollars that are needed for true core government services including basic education funding – the governor’s purported number one priority in his budget plan. But is it?

Speaking at the PMA headquarters at a Monday morning briefing for business leaders, state Senator Ryan Aument (R-Lancaster) said that, in the last analysis, the governor wants his tax increases above all. "Increasing taxes, especially the personal income tax, I believe remain his true focus," Aument said.

Aument continued, saying the pressure will really mount when the non-profit social services programs run out of money and schools start closing. "A lot of social service programs are now borrowing money to keep their doors open, and the first schools to threaten to close will be the ones most dependent on state funding," Aument said. "That could start in a month or two."

Even Democratic members are conceding where the problem lies. Last week, Rep. Peter J. Daley (D-Fayette) speaking at a town hall meeting predicted that his colleagues would vote for a Republican budget if the governor doesn’t compromise. "The governor is a businessman," quoted Daley as saying. "He does not understand in government you have to work it out. Democracy is about compromise."

If the governor wants to "keep up the pressure," it’s working; it just might not be working as he planned.

As for next steps, look for Republican leaders to attempt a veto override of the stopgap measure in the near future while negotiations on a final budget continue. As always, PMA will keep you updated with the latest budget news.

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October 2, 2015 – National Manufacturing Day

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