Wolf, GOP Spar: Governor Vows Veto Of Stopgap Spending Bill

HARRISBURG, Pa. (KDKA/AP) - Gov. Tom Wolf and top Republican senators sparred in the Capitol on Wednesday, as talks aimed at breaking a budget stalemate dragged on and the Democratic governor vowed to veto a short-term spending package that the GOP began advancing.

"Today is a startling example of how broken Harrisburg is. This is really ridiculous," Wolf said.

With those words following another failed budget meeting, an unusually passionate and angry Governor Wolf excoriated Republican legislative leaders late Wednesday.

Leaders of the Legislature's Republican majorities bristled at what they called Wolf's rejection of their month-old offer to break the stalemate and his continued insistence on a multibillion-dollar tax increase.

"Never in my life -- and I've been in negotiations all my adult life -- I have never been in negotiations like this," Wolf said.

"Today I put on the table historic reforms on pension and liquor, pensions and liquor -- two things they say are very important to them."

Wolf said he offered Republicans a 401K plan as part of pension reform and a plan to use private sector managers for wholesale and retail liquor sales.

"And what to get in return? Nothing. I got nothing on severance tax. Nothing. I got nothing on education. Nothing. I got nothing on property tax relief. And I got nothing on how we are actually going to balance this budget."

Instead, the governor said, Republican leaders want to pass a stop-gap budget kicking the can.

"They're poking me in the eye again, that's exactly what this is about," Wolf told reporters during a news conference in his Capitol offices. "They want to see how far they can push me. They can't. ... This stopgap (plan) is a poke in the eye and I'm treating it as such. I'm going to veto it."

He also said that the day had served as a "stark example of how broken Harrisburg is."

Republicans said that, in any case, an agreement is weeks away and cash-strapped schools and social-services organizations should not be held hostage in the meantime.

"What is the harm of getting the money out to these folks while we continue to talk?" Senate Majority Leader Jake Corman, R-Centre, said. "I just can't understand the harm of a stopgap budget and why anybody would veto it."

The $11 billion stopgap bill would deliver four months of money, retroactive to July 1. It passed the Appropriations Committee on a party-line vote Wednesday, and Senate passage was expected later this week. House action is expected next week.

Wednesday's counteroffers, as outlined by the Wolf administration, included gestures toward two key GOP demands: that the state privatize its control of wine and liquor sales and replace the traditional pension benefit for future school and state government employees with contributions to a 401(k)-style retirement plan.

As a compromise, administration officials said they offered to hire a private manager to run the state's wine and liquor system. That included the possibility of allowing alcoholic beverages into supermarkets and convenience stores, they said.

On pension benefits, administration officials said they had proposed a plan to save $20 billion in the coming decades on pension debt, partly by imposing a $75,000 limit on the amount of an employee's salary that would count toward the traditional pension benefit. Salaries above that would get a 2.5 percent match in a 401(k)-style plan, they said.

Still, Wolf continued to insist on a multibillion-dollar tax increase, in part to wipe out Republican-passed funding cuts in previous years and to resolve a long-term budget deficit.

Earlier in the day, top Republican state senators briefed reporters on their talks and said that Wolf had rejected their Aug. 19 offer.

That offer included meeting a key demand of Wolf's to boost state aid to public schools in exchange for him supporting a Republican measure to replace the traditional benefit in Pennsylvania's major public pension systems with a 401(k)-style plan.

The failure of Governor Wolf and the state legislature to reach agreement on a budget has now resulted in a lawsuit by the Pennsylvania Council of Children, Youth and Family Services whose members provide services to 15,000 residents.

What's not getting funding?

"Basic necessities, the provision of food, clothing, shelter, safety monitoring, coordinating medical dental psychological services, educational services, and the juvenile justice system is impacted as well," the Council's attorney Joel Frank told KDKA money editor Jon Delano on Wednesday.

"It has been a horrific experience," says Dan Heit, CEO of Justice Works, a social service agency that serves 2,000 families in 32 counties.

"We've been through it before, sadly. We're between a rock and a hard place."

Justice Works is a member organization of the PCCYFS, which filed the lawsuit with the Commonwealth Court, asking that the Wolf Administration pay social service agencies the money they are owed.

Heit says, since the budget crisis began on July 1, his agency is owed more than $2 million.

The failure to get that money means he's having a hard time meeting payroll for his employees, so he's about to do something pretty extraordinary.

Heit: "I have to fund payroll tonight and I don't mind telling you that the only way I was able to do was by to take a loan from my own personal retirement account because we're just stuck."

Delano: "You're borrowing from your own pension?"

Heit: "Yes."

Delano: "In order to pay your workers?"

Heit: "Yes."

Delano: "Because the state legislature and the governor haven't agreed?"

Heit: "That's correct. It's unconscionable."

The governor's office blames the legislature, saying it can't send money to the counties that largely fund these services until a budget is passed.

Heit echoes many Pennsylvanians with this advice to Harrisburg.

"Governor and the state legislature, please get your act together. There are people at risk who need the support of our government."

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