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Budget Bill Heads to Governor’s Desk Absent Revenue Package

Last week, in the days leading up to the end of the 2015-16 Fiscal Year, the House and Senate engaged in a back-and-forth with S.B. 1073 – the General Fund budget bill. First, the House voted 132-68 on a $31.55 billion spending plan that represented a 4.8 percent increase in spending, which House Republicans proposed be funded through a combination of higher tobacco taxes, a tax amnesty program, gambling expansion and revenues through the new liquor reform law.

When the Senate received the bill, amendments were adopted before they passed the legislation 47-3. The amended bill appeared to spend $20 million less than the House-passed version while increasing higher education funding by $39 million, or 2.5 percent (the House plan level-funded higher education for the upcoming Fiscal Year). The Senate accomplished this by moving $95 million for the Commonwealth Financing Authority out of the General Fund into a restricted account, which is why the total spending figure appeared reduced. On Thursday, June 30 – the last day of the 2015-16 Fiscal Year – the Senate-amended version of S.B. 1073 was passed on concurrence by the House and sent to Gov. Tom Wolf, who applauded lawmakers for coalescing around a budget agreement and said he would sign the legislation once an agreement over revenue was reached.

Notably, the House and Senate votes on the budget bill this year earned strong bipartisan support. The bill substantially increases funding for basic education (a priority for the Wolf administration) with a $200 million increase, to a record $5.985 billion; and authorizes $15 million for the governor’s initiative to address the Commonwealth’s heroin and opioid addiction crisis.

However, to date, there has yet to be a final agreement on the revenue package to pay for this increase in spending. While a sales or Personal Income Tax increases appear to be off the table (increases to both were originally proposed in the budget plan Gov. Wolf put forth in February), a number of other revenue enhancers are being discussed. The House and Senate both stand in recess and are on a six-hour call of the Chair. They are expected to reconvene when a revenue agreement is imminent.

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