Your 2013 "State Budget Month" Preview

June is typically the most active month in the State Capitol in terms of legislative activity. The June 30 budget deadline also serves as a defacto deadline for other major proposals that have been swirling around all year; it’s one of the few pressure points in an institution that seems largely immune to public pressure to actually get things done.

The parameters of the game vary each year based on the players. For the third year in a row, the Republican party controls the House of Representatives, the State Senate and the Governor’s mansion, making the budget negotiations themselves a decidedly one-party affair. Without the need for Democratic support, the $28.3 billion spending plan moved out of committee by the House Republicans likely won’t undergo a whole lot of major changes before being signed into law by Governor Corbett.

This year’s storyline is more about what other big-ticket items, if any, get passed in conjunction with the state budget.   Of the three big proposals out there, the one least likely to pass in the next month is pension reform. We’ve been hearing a lot about billions of dollars in unfunded pension liability, but in many ways those numbers are unrealistic; they assume that the two state pension systems (SERS and PSERS) would have every single employee retire at the exact same time and that the systems be 100% funded, two virtual impossibilities.  

Three years ago the legislature passed Act 120, a law designed to lower pension liability over time; many feel enough time hasn’t passed to let Act 120 do what it’s designed to do. Others feel it’s unfair to simply reduce the benefits of retirees, who paid their share into the pension systems, just because the state hasn’t honored its commitments. For all these reasons and more, the odds of any pension reform passing the House prior to June 30 are extremely slim.  

The remaining two issues are much more closely linked; liquor privatization and transportation funding. The House passed a liquor privatization bill along party lines earlier this spring, but the Senate has clear reservations about the approach and may be favoring more of a “modernization” than a “privatization”. Strong protests from beer distributors to the House plan have exposed some of the flaws in the bill, and the word is still out on whether the Senate will send a more tempered version of liquor privatization back to the House for approval.

Transportation funding is one of the biggest “lifts” the Legislature has made in years; the version moving through the State Senate this week calls for $2.5 billion in funding to improve Pennsylvania’s roads and bridges. This funding comes from uncapping the wholesale tax on gasoline (which could amount to thirty cents per gallon), plus increased fees for drivers’ licenses and vehicle registrations and a $100 surcharge for every moving violation incurred by a driver in Pennsylvania.  

The transportation package seems to have broad support in the Senate, but no one is sure if the House Republicans are thrilled to vote on a bill that will have Grover Norquist screaming bloody murder. Some House Democrats are wondering why they should vote for a Republican-authored funding package many House Republicans might not be willing to vote for themselves.

The House Republicans are adamant about getting a liquor bill done in exchange for taking up the transportation funding bill pushed by the Senate Republicans, so a trade seems likely, if not inevitable. So aside from the budget itself, how much else will get done in Harrisburg this June? With all the moving parts coupled with the unpredictability of the Legislature, it’s really anyone’s guess.