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

by on Dec 08 2015

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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