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Wolf, lawmakers resume talks with GOP offer on school aid

4 min read

HARRISBURG – Top Republican lawmakers said Wednesday they will meet a key demand of Gov. Tom Wolf’s to boost public school aid, even if it requires a tax increase, but they continued insisting on an end to the traditional benefit in Pennsylvania’s two big public employee pension systems.

Leaders of the Pennsylvania Legislature’s Republican majorities made the offer during a brief meeting with the Democratic governor in the Capitol. It came amid a 7-week-old budget stalemate that has started to shut down crucial safety-net services around Pennsylvania as Wolf and Republicans trade barbs in public.

The move by Republicans meant they were summarily rejecting Wolf’s week-old counterproposal that would have kept most of the traditional pension benefit intact for hundreds of thousands of future public employees. But it also upped Republicans’ commitment by $300 million to the state’s primary funding account for public schools, meeting the $400 million increase Wolf has sought for a total of $6.1 billion.

“I need them to move into my camp on education and so they’ve done I think a pretty good job there,” Wolf told reporters as he left the meeting. “But there are conditions and that’s the things we have to talk about.”

Wednesday’s exchange, however, does not resolve a host of other demands brought to the negotiating table by both sides. No new meetings were immediately scheduled.

The GOP’s offer would require Wolf to agree to a top Republican priority of shifting Pennsylvania’s two big public pension systems to a 401(k)-style plan for state government and public school employees who are hired in the future. Wolf has balked at that, as have Democratic lawmakers, and it is staunchly opposed by public employee labor unions.

“This is a huge move, a huge change in the tenor of the meetings and I would hope that the governor takes this proposal seriously and gets back to us as quickly as possible because this will move conversations quickly to … be able to finalize a state budget,” Senate President Pro Tempore Joe Scarnati, R-Jefferson, said.

Senate Majority Leader Jake Corman, R-Centre, acknowledged that scrounging an additional $300 million would require finding new money. The source of it would have to be negotiated, Corman said.

Republicans contend that switching the pension systems to a 401(k)-style benefit will ensure the state does not roll up another massive debt, such as the projected $50 billion combined debt the systems now face. Wolf, however, has said that the traditional pension benefit is a more efficient way to ensure retirement security for public workers.

The stalemate began June 30 when Wolf vetoed the Republicans’ $30.2 billion budget package, saying it did not do enough to help public schools still struggling after the GOP’s deep cuts in aid in 2011 and that it worsened the state government’s long-term deficit.

Republicans have rejected Wolf’s $31.6 billion budget proposal, saying they did not support the multibillion-dollar tax increase necessary to support it.

The GOP’s new proposal is unlikely to go anywhere fast.

Corman said Republicans are not interested in a counterproposal and called the GOP’s move a one-time offer that, if rejected, means “we’re back to square one.”

During the meeting, Republicans told Democrats they would not consider a tax increase on income, sales or natural gas production from the Marcellus Shale reservoir. Raising taxes on the natural gas industry has been a top priority of Wolf’s going back to his successful campaign last year.

Meanwhile, in a subsequent email message to rank-and-file House Republicans on Wednesday, House Majority Leader Dave Reed, R-Indiana, wrote that “liquor privatization must also be agreed to” by Wolf. That idea – giving the state government’s control of wholesale and retail wine and liquor sales in Pennsylvania to private licensees — also is opposed by Wolf and Democratic lawmakers.

Democrats were cool to the GOP’s new stance.

Senate Minority Leader Jay Costa, D-Allegheny, questioned where Republicans stood on Democrats’ broader goals for education aid – Wolf proposed nearly $1 billion more for pre-kindergarten programs, public schools and universities.

Also, Costa said, Democrats want an independent actuarial analysis of the changes being sought by Republicans to the state’s two major public employee pension systems. Republicans said the changes would save the state $12 billion on pension obligation payments over approximately 35 years.

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