The House and Senate Republican majorities in the Pennsylvania Legislature are scrambling to advance major legislation to the desk of Gov. Tom Wolf in the final days of the state government’s 2014-15 state fiscal year, which ends Tuesday night. Details of the pieces of legislation were still emerging Saturday and potentially changing in the days ahead. Here is a summary of the latest details:
The Republican budget plan would authorize nearly $30.2 billion in spending through the state’s main bank account. That is an approximately $1.15 billion increase, or 4 percent, mainly for growing pension obligation payments, the rising cost of health care for the poor and a $100 million increase, or nearly 2 percent, in aid for public school instruction and operations. It does not increase any broad-based taxes, it cuts corporate taxes and assumes that tax collections will grow slowly next year, at less than 1 percent. The budget package also covers what Republicans call an approximately $1.3 billion deficit by using well over $1 billion in one-time stopgaps, including $375 million from this year’s surplus tax collections, more than $500 million from off-budget programs, and another more than $500 million in payment delays. Democrats also say the Republican budget includes hundreds of millions more in questionable assumptions about revenue, savings and refunds. It also would count on $220 million in projected licensing receipts from yet-to-be-passed legislation to privatize the state-controlled wine and liquor store system.
The Republican plan to make significant change to public pension benefits for state government and public school employees is estimated by backers to save about $12.5 billion in payments over 30 years on a pension debt currently estimated at $53 billion. It would not provide any immediate help to the state’s budget or school district budgets. The bill would end the traditional pension benefit for the vast majority of future employees by directing them into a 401(k)-style retirement plan. The employer match would be 2.6 percent for school employees and 4 percent for state government employees. Future employees also would have to contribute 3 percent of salary into a cash-balance plan that guarantees the employee a return of up to 4 percent. The state keeps extra investment gains from the cash balance contributions. After an amendment in a House committee, the plan now differs in two important ways from the version that passed the Senate in May. Now, it maintains the traditional pension benefit for various employee classes, including Pennsylvania State Police troopers, Capitol Police officers and state corrections officers. Also, it killed a provision in the Senate version to require many current employees to contribute more money to maintain the more generous benefit terms they were granted in a 2001 law.
WINE AND LIQUOR
The Republican plan to allow private licensees to take over the state-controlled sale of wine and liquor in Pennsylvania will not differ in important ways from a plan that passed the House in February. The latest plan being written in the Senate would allow approximately 14,000 holders of licenses to sell beer _ including retail distributors, carryout delis, restaurants, bars, hotels and grocery stores _ to pay a higher license fee to also sell wine or liquor or both. The plan would not otherwise create licenses for new outlets to sell strictly wine and liquor, although if a beer distributor does not choose to sell wine or liquor, that wine and liquor license could be auctioned off. It would order the Pennsylvania Liquor Control Board would to close a retail state store _ there are approximately 600 statewide _ when it finds there is adequate private-sector service in the area. Wholesalers seeking a license to market and ship wine or liquor would have to pay a percentage of their sales as a license fee, possibly 10 percent or more. Backers say it would deliver about $220 million to the state treasury each year.