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After another pact falters, uncertainty returns to long-overdue Pa. budget

By Kevin McCorry for NewsWorks on Dec 8, 2015 11:06 AM

For the second time in a month, a tentative deal to end Pennsylvania's five-month budget impasse has fallen apart.

Gov. Wolf and legislative leaders on both sides of the aisle came to an agreement late last week that would provide a historic $400 million boost to K-12 education funding by increasing the number of items eligible for sales tax.

Also key to the deal: Leaders agreed to allow wine to be sold in supermarkets and came up with a pension reform compromise that would call on new employees covered by the state pension system — including teachers — to share some of the market risk in their retirement plans. They would enter a hybrid plan that incorporates aspects of 401(k)-style plans.

The tentative deal, though, came off its wheels over the weekend when it became clear that House leaders couldn't sell rank-and-file members on the finer details of the blueprint.

In part, the larger budget negotiations were derailed by a debate about haircuts.

"They want to tax haircuts. So if I'm a family that has four kids, I'm now paying taxes on haircuts," said State Rep. Fred Keller (R-Union).

Included on the tentative list of new items subject to the sales tax are personal services including haircuts, manicures and pedicures.

"Why does state government consistently have an appetite to spend more, and take more of your money?" Keller asked. "I didn't come down here just to mark time. And this budget, it's a hill I'm willing to die on. I've planted my flag and I'm saying: pay for it some other way."

Keller is not alone in his displeasure. On Monday, as the Senate passed a bipartisan spending bill that would deliver a $460 million increase to pre-K through 12 education, the House appropriations committee advanced a much more modest spending plan — akin to one Wolf vetoed in June.

Steve Miskin, spokesman for House Majority Leader Dave Reed (R-Indiana) and House Speaker Mike Turzai (R-Allegheny), said the pair believed that they could sell the framework to rank-and-file members, but found more opposition than they expected.

"If the members are being asked to put up these tax votes, they want something more robust," said Miskin, of plans to change the pension and liquor systems.

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Comments (80)

Submitted by Anonymous (not verified) on December 8, 2015 10:57 am

This is the Republicans playing ping pong with Wolf. The Senate agrees to something but the House doesn't. If the House would agree to something the Senate won't. JUST SHUT DOWN THE STATE UNTIL THESE MORONS ARE SQUEEZED BY THEIR CONSTITUENTS. Then we will have a real budget. Harrisburg should just go home until next year and see how many school districts close before voting on a budget.

Submitted by Public Schools Matter (not verified) on December 8, 2015 11:43 am
In this corner a successful businessman with a PhD from MIT , Gov. Tom Wolf, and in this corner a community college graduate and life long public servant, albeit a sworn enemy of "big government" Leader Corman... My God, I never thought the republicans would collapse so quickly. Just look at Trump and his anti Muslim ploy, taking out a page right out of Hitler's Mien Kampf. Why isn't the ACLU and ADL asking questions to Herr Trump? Republicans don't want to govern, they want t o rule...
Submitted by Dow Jones AAPL (not verified) on December 8, 2015 4:40 pm

So you're saying you're okay with a hybrid pension plan that shifts some stock market risk to employees?  That's smart because the Dow Jones Industrial Average is still underwater for the year.  PSERS assumed it would be up 8%.  

Submitted by Public Schools Matter (not verified) on December 8, 2015 5:06 pm
hello Bill Green. No I am NOT in favor of pension reform for you but maybe optionally pension reform for me as a state legislator. This is the hypocrisy that the Republicans are vomiting on the American people. I don't understand why your insist I'm not answering the Trump question giving his clear fascist, hate mongering because one of the first people that Hitler put in jail were speculators you know people who play the derivatives game, so be careful for what you wish for because you might get Trumped. In regards to the 8 percent reference you seem to be traumatized by, it's all a sham. The stock market is rigged, it's been institutionally rigged since Nixon when he put in place "the plumbers" to fix "liquidity matters" when the markets bombs. And yes, the plumbers are still in place. They have now morphed into "super computers glitches" like the one that happened during the summer. OK, enough for now. Herr Trump is on Fox go get your fix Bill.
Submitted by Federal Reserve (not verified) on December 8, 2015 5:20 pm

If the stock market is rigged, why is PSERS invested in it?? Why are teachers depending on big corporate profits to fund the pension checks?   Why aren't YOU worried about  the unrealistic 8% discount rate PSERS uses?  If PSERS investments in its garbage porfolio don't grow that much, then schools can forget about nurses and counselors and union subs coming back.  

Submitted by Public Schools Matter (not verified) on December 8, 2015 9:57 pm
In your own pedantic way, Bill, you're kinda entertaining with your rhetorical regurgitations. You know damn well that PSERS' guiding committee is dominated by reoublican hacks. But thats OK I'll play along and make believe you don't know that. Likewise, as your nom de guerre states there is a private FASCIST takeover of public funds in our country. Much like the god forsaken, antiAmericam Federal Reserve that is a cabal of private bank mostly European that lend money to themselves, never, ever to American cities nor states but certainly does charge them when the private THIEVING banks need a bailout. Only a misanthrope, Libetarian like yourselve can discount the welfare of children over some economic theory that is fixated in your psyche. Seek help. BTW, when Syria kills off the remaining USA and EU backed ISIS murderers and retains its own central bank, many others will want to follow free Syria steps. What is the cabal in the Federal Reserve going to do then? Long live FDR...
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Submitted by Poor (not verified) on December 8, 2015 12:05 pm

How long until we get raises here in Philadelphia?

Submitted by Annoy (not verified) on December 8, 2015 1:37 pm

Oh, maybe... 2019, 2020....

Submitted by Anonymous (not verified) on December 8, 2015 1:12 pm

Well, The WE caucus that is running against Jerry Jordan has their platform saying they will get retroactive increases and step raises for the past 3 years. These people are delusional as one can see from the amount of money Harrisburg is fighting not to provide statewide. Anyone that thinks WE has two brains cells to rub together should go to Colorado and get something there they can smoke legally.

Submitted by Anonymous (not verified) on December 8, 2015 5:20 pm

There are plenty of places to get money. Tax fracking. Return corporate taxes to what they used to be. Stop the endless wars which only gets us deeper into a quagmire.

These step increases are in the teachers agreed to contract. New teachers have lost thousands of dollars over the last few years as Harrisburg starves our schools.

If we just accept the steady erosion of our living standards and our educational system we are just going along with this robbery.

"But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. --" Thomas Jefferson, The Declaration of Independence

Submitted by Federal Reserve (not verified) on December 8, 2015 5:59 pm

Um...corporate taxes are already 30%--and then you wonder why corporations keep their money off shore.  

"CalPERS has an iron fist, and a glass jaw".--Judge Klein, after he ruled that pensions can be cut in a municipal bankruptcy in Stockton.  

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Submitted by Anonymous (not verified) on December 8, 2015 1:26 pm

Well, The WE caucus that is running against Jerry Jordan has their platform saying they will get retroactive increases and step raises for the past 3 years. These people are delusional as one can see from the amount of money Harrisburg is fighting not to provide statewide. Anyone that thinks WE has two brains cells to rub together should go to Colorado and get something there they can smoke legally.

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Teachers are incredibly math-challenged.   In Chicago Karen Lewis is telling teachers to save 25% of their income in preparation for a long strike next year.   She must still think the city is hiding money somewhere in a secret vault.  

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Submitted by Dow Jones MSFT (not verified) on December 8, 2015 5:47 pm

No budget, the stock market is treading water, the bond market is in a complete mess, hedge funds (that PSERS invests in) are lying about their investment returns, and probably Janet Yellin is going to change her mind about raising rates again.  2016 should be another big year for budget cuts.  At least Lloyd Blankfein and Jamie Dimon are happy since they just became billionaires from the fees they collected from public pension funds.  

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