A New Governor and House and Senate leadership changes will make this an interesting session.
2015 is an unusual year in Pennsylvania’s legislative and executive branches of government. Not only was there a switch in both the Governor and the party affiliation of that Governor, but there is a change in House leadership with a new Speaker and Majority Leader and a new Majority Leader in the Senate.
As 2015/16 budget negotiations begin in earnest, each of these new negotiating parties have made clear their priorities for the upcoming months. A few of those priorities are shared below.
Governor Wolf
What he wants — Greater education funding in the state budget. The Governor’s proposed 2015/16 budget features a $400 million increase in basic education funding, as well as 11 percent increase for state universities. This would primarily be paid for with an increase in sales and personal income taxes, as well as additional drilling fees and taxes for energy companies.
How does the House feel about that? House leadership has shown a willingness to consider education funding increases, but not nearly to the levels proposed in the Governor’s draft budget. Sides are far apart on that spend number.
How does the Senate feel about that? Pension reform has become the central priority for Senate leadership, and that has affected Senate leadership’s view of education funding. Until the state’s contribution to teachers and other state employees is addressed, the Senate appears uninterested in tackling additional education funds.
The Senate
What they want – Pension reform. The Senate has passed its version of pension reform, which primarily moves new hires from a defined benefit plan, or traditional pension, to a defined contribution plan, much more akin to a 401K type of retirement plan.
How does the Governor feel about that? The Governor has come out strongly against any attempts to change pension structures for public sector employees, and the Governor’s office has publicly criticized the Senate plan as insufficient and has even gone so far as to call the plan a financially self-serving move by Senate leadership. The Governor has instead proposed a bond to address funding pension shortfalls.
How does the House feel about that? The House last made an attempt to address pension reform last year, but failed to convince enough House members to get the 102-vote majority necessary to pass reform. House leadership has not taken up the mantle since.
The House
What they want -— Property tax reform. Pennsylvania voters have long been filling their legislators’ inboxes with complaints about rising property taxes, and House leadership has made it their cause for the early months of the 2015/16 legislative session. A plan replacing property taxes with a mix of increased personal income and sales taxes has been publicized (although not voted) by the House.
How does the Governor feel about that? The Governor’s office has proposed its own property tax plan with enough similarities to the House version to pique interests. But there are still enough differences between the two to test negotiations, such as broadening of the tax base, the amount of relief, local control over funds, and specific relief for Philadelphia.
How does the Senate feel about that? With property taxes primarily dedicated to school funding, Senate leadership has indicated that pension reform would be necessary to curb spending prior to consideration of property tax reform.
These interlocking yet distinctive priorities have cast anxiety over 2015/16 budget negotiations. Experts have likened it to a house of cards, where failure of one party to address the priorities of the other could easily leave negotiations at an impasse. All this will likely result in a tense month of negotiations before the end of the State fiscal year in June, with a high likelihood of spillover into July and beyond.
As 2015/16 budget negotiations begin in earnest, each of these new negotiating parties have made clear their priorities for the upcoming months. A few of those priorities are shared below.
Governor Wolf
What he wants — Greater education funding in the state budget. The Governor’s proposed 2015/16 budget features a $400 million increase in basic education funding, as well as 11 percent increase for state universities. This would primarily be paid for with an increase in sales and personal income taxes, as well as additional drilling fees and taxes for energy companies.
How does the House feel about that? House leadership has shown a willingness to consider education funding increases, but not nearly to the levels proposed in the Governor’s draft budget. Sides are far apart on that spend number.
How does the Senate feel about that? Pension reform has become the central priority for Senate leadership, and that has affected Senate leadership’s view of education funding. Until the state’s contribution to teachers and other state employees is addressed, the Senate appears uninterested in tackling additional education funds.
The Senate
What they want – Pension reform. The Senate has passed its version of pension reform, which primarily moves new hires from a defined benefit plan, or traditional pension, to a defined contribution plan, much more akin to a 401K type of retirement plan.
How does the Governor feel about that? The Governor has come out strongly against any attempts to change pension structures for public sector employees, and the Governor’s office has publicly criticized the Senate plan as insufficient and has even gone so far as to call the plan a financially self-serving move by Senate leadership. The Governor has instead proposed a bond to address funding pension shortfalls.
How does the House feel about that? The House last made an attempt to address pension reform last year, but failed to convince enough House members to get the 102-vote majority necessary to pass reform. House leadership has not taken up the mantle since.
The House
What they want -— Property tax reform. Pennsylvania voters have long been filling their legislators’ inboxes with complaints about rising property taxes, and House leadership has made it their cause for the early months of the 2015/16 legislative session. A plan replacing property taxes with a mix of increased personal income and sales taxes has been publicized (although not voted) by the House.
How does the Governor feel about that? The Governor’s office has proposed its own property tax plan with enough similarities to the House version to pique interests. But there are still enough differences between the two to test negotiations, such as broadening of the tax base, the amount of relief, local control over funds, and specific relief for Philadelphia.
How does the Senate feel about that? With property taxes primarily dedicated to school funding, Senate leadership has indicated that pension reform would be necessary to curb spending prior to consideration of property tax reform.
These interlocking yet distinctive priorities have cast anxiety over 2015/16 budget negotiations. Experts have likened it to a house of cards, where failure of one party to address the priorities of the other could easily leave negotiations at an impasse. All this will likely result in a tense month of negotiations before the end of the State fiscal year in June, with a high likelihood of spillover into July and beyond.
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