By Kevin Zwick
HARRISBURG (May 21) – The House Appropriations Committee voted along party lines to approve the Senate’s $27.65 billion budget plan, after blocking House Democratic amendments.
House GOP leaders plan to amend it in coming weeks after budget negotiations yield further progress.
The panel voted 21-14 to send the bill to the House floor after more than two hours of partisan debate.
A motion by House Appropriations Chairman Bill Adolph, R-Delaware, passed with a party-line vote, required amendments to Senate Bill 1466 be revenue neutral.
His motion essentially undercut attempts by House Democrats to amend the budget bill using the remaining $300 million from the Independent Fiscal Office’s roughly $800 million revenue projection for the next fiscal year.
“We saw where the revenue was projected by the governor back in February. And then over the last two months, we saw the revenue come in higher than projected. However, we also have the advantage of waiting another month. It’s now the 21st of May, and revenues have been lower than projected,” Adolph said.
“If the [Democrats] want to increase the revenue they certainly can, and we would consider those amendments,” he said. However, only a tax increase or shifting funds from other line items to cover increases are viable options to increasing spending, according to House Appropriations spokesman Mike Stoll.
“There was no new taxes suggested, there was not spending money we don’t have. That extra $300 million is there,” said House Democratic Leader Frank Dermody, D-Allegheny.
CLICK HERE to read a GOP Appropriations spreadsheet.
The Senate’s $27.65 billion proposed budget used $500 million of the roughly $800 million in unanticipated revenue projected by the IFO, including revenues projected to come in next year.
The House Democrats planned to use the remaining $300 million to increase spending levels for items that have bi-partisan support, including block grants used for all-day kindergarten, human services, and hospitals and nursing homes.
“We had 10 amendments that we did a lot of homework on to make sure they were revenue-neutral, to make sure they did not go above the additional $300 million that most of us in the room and those of us in the committee room know is there,” Democratic Appropriations Chairman Joe Markosek, D-Allegheny, said after the meeting. “The Independent Fiscal Office said the money is there.”
“So we weren’t doing anything to raise taxes or be irresponsible, but yet, they basically took the microphone away from us,” he added.
According to GOP Appropriations staff, fiscal indicators are predicting poorer May revenue collections, putting a grim picture on any better-than-anticipated revenue projections for the end of the fiscal year.
GOP budget analyst Ritchie LaFaver said corporate revenue collections are down for the month of May, according to a Global Insights forecast, part of which he read, saying: “the incoming evidence on growth has softened, raising the specter of another mid-year slowdown in the recovery.”
The projected growth was lowered from 4.02 percent to 3.87 percent, Adoph said.
Ed Nolan, executive director of the Appropriations Committee, said the governor’s budget relied on transfers from other funds, while the Senate budget restored some of those transfers.
“In effect, it’s restoring money back into those funds as well. So it’s not just on the spending side, but on the revenue side. Some of that money you’re talking about that the Independent Fiscal Office recognized is being used,” Nolan said.
Two amendments out of the 10 offered by Democrats received a vote, but were voted down on party lines.
One amendment would have established a restricted account to receive $65 million in anticipated settlement funds from a national mortgage lawsuit. Adolph encouraged a ‘no’ vote, saying the state hasn’t received the money yet. The Senate on May 9 sent to the House legislation that would establish a trust fund to use the $266 million Pennsylvania is set to receive in installments as part of the $25 billion joint state-federal mortgage settlement with the country’s five largest loan servicers.
The other amendment would have used $15 million in lapsed funds from the Public Transportation Trust Fund to address mass transit needs. Adolph called for a ‘no’ vote, saying the issue was outside the budget.
All amendments to be filed to the budget bill must be filed by Tuesday, May 29 at 2 p.m.