A look at the differences in what Republicans, Wolf want
The budget stalemate between Democratic Gov. Tom Wolf and leaders of the House and Senate Republican majorities in the Pennsylvania Legislature has hit 86 days. Here is a summary of their key objectives and what they have made public about their compromise offers:
Budget: Republicans passed a $30.2 billion budget plan, an approximately $1.15 billion increase, or 4 percent. That includes an approximately $200 million increase, or 2 percent, in aid for public schools, universities and early childhood education. The plan did not increase any broad-based taxes, but used well over $1 billion in one-time stopgaps to cover a long-term deficit.
Pensions: Republicans passed legislation to end the traditional pension benefit for most future state government and public school employees and replace it with contributions to 401(k)-style retirement plans. 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 a portion of extra investment gains from the cash balance contributions.
Wine and liquor: Republicans passed legislation to allow private licensees to take over the state-controlled sale of wine and liquor in Pennsylvania. It would allow approximately 14,000 holders of licenses to sell beer – including retail distributors, restaurants and bars – to pay a higher license fee allowing them to also sell wine or liquor or both. It would order the Pennsylvania Liquor Control Board to close a state-controlled retail store whenever it finds there is adequate private-sector service in the area. Wholesalers seeking a license to market and ship wine or liquor would pay a percentage of their sales as a license fee.
Education: Republicans said they would meet Wolf’s demand to increase the main funding account for public schools by $400 million, to $6.1 billion, up from $100 million increase proposed in their budget.
Budget: Wolf proposed a $31.6 billion budget plan, an approximately $2.6 billion increase, or 9 percent. That includes an approximately $800 million increase, or 9 percent, for public schools, universities and early childhood education. To support the increase, and wipe out a long-term budget deficit, a multibillion-dollar increase in various taxes – $4.6 billion once fully in effect in the 2018-19 fiscal year, according to the Independent Fiscal Office – would be necessary. Legislative negotiators say Wolf is willing to agree with Republicans to forgo a $306 million payment to the school construction fund in favor of a long-term borrowing scheme. That would drop his budget plan to $31.3 billion.
Natural gas: Wolf wants a new severance tax on Marcellus Shale natural-gas production – 5 percent of value, plus 4.7 cents per 1,000 cubic feet of gas – to take effect Jan. 1, 2016.
Property taxes: Wolf proposes raising $3.2 billion from increased taxes on sales and income to reduce school property tax bills. House Republicans passed a similar, $4.2 billion package. The two plans would distribute the money substantially differently to school districts. The bill has stalled in the Senate.
Pensions: Wolf is proposing a plan that would impose a $75,000 limit on the amount of an employee’s salary that would count toward the traditional pension benefit for most future state government and public school employees. The portion of salaries above that would get a 2.5 percent match toward a 401(k)-style retirement plan. All employees would be given the option to participate in a 401(k)-style retirement plan at their time of hire. A $3 billion bond would be issued to refinance public school employees’ pension liability.
Wine and liquor: Wolf is proposing a plan to hire a private manager to run the state’s wine and liquor system. That includes the possibility of moving retail stores and allowing wine or beer sales in supermarkets and convenience stores. Administration officials say the state would continue to own liquor stores and employ the workers. Administration officials say they have few details to offer about the plan because it barely been discussed with lawmakers and much of it is open to negotiation.