Oct 7, 2009 9:32 pm US/Eastern
Poker, Gas Leases Among Issues Stalling Pa. Budget
HARRISBURG, Pa (AP) ―
Natural gas drilling on state lands, table games in casinos, a welfare bill and other key sticking points continued to hold up Pennsylvania's state government budget Wednesday, the eve of the 100th day since its fiscal year began without a full spending plan.
Legislators made progress, however, as the House voted 102-to-96 to approve a tax package that the Senate had already passed, increasing cigarettes by a quarter a pack and subjecting some businesses to a higher capital stock and franchise tax, although some other business taxes were lowered. The nearly party-line vote sent the bill to Gov. Ed Rendell.
"In the face of these tough economic times, times that are making doing business difficult all over this country and here in Pennsylvania, we are making improvements to our business tax structure," said Rep. Mike Gerber, D-Montgomery.
Republicans argued the taxes were too high, and said the budget could be balanced with further cuts, a position the caucus has consistently advocated this year.
"This bill is one of the largest tax increases ever on the citizens of Pennsylvania, and the fact of the matter is that we do not need a tax increase to have a responsible budget," said Minority Whip Mike Turzai, R-Allegheny.
Following the tax vote the parties went into closed-door caucuses, and the House was expected to take up the general appropriations bill -- the main spending measure -- in a Wednesday night session.
The Senate, which had approved a full set of budget bills during the previous two days, did not hold a floor session Wednesday.
Earlier in the day, the House approved a bill consolidating statutes that govern state constables and provide funding for full-time district attorneys. An Associated Press series last year recounted examples of criminal misconduct by constables, who serve warrants and perform other duties for the state's low-level district courts.
In recent weeks, negotiators have announced two budget deals, only to see them fall apart.
House Majority Leader Todd Eachus, D-Luzerne, said one of the biggest remaining holdups concerned how much to tax table games at the state's slots casinos. He said a tax rate of 17 percent or 18 percent on games, such as poker and blackjack, is needed to balance the budget. The gambling expansion was expected to be addressed in a separate bill that Eachus said would not be voted on Wednesday.
Democrats also want to limit drilling for natural gas on state-owned forest land to 30,000 acres and collect at least $3,000 per acre. A Senate-passed bill put a $2,500-per-acre floor on the leases but did not set a limit on the amount of land.
The gas leasing was part of legislation that Eachus said would probably be taken up Thursday.
Senate leaders decided to press ahead this week with bills of their own, partly out of a sense that high-level negotiations had produced more frustration than results. Tuesday, the Senate approved a $27.8 billion plan that would cut overall spending by more than 1 percent and increase funding for basic education by $300 million.
The tax bill did not include several tax increases proposals that had generated heated debate over the past months, including on retail sales, personal income, gas drilling, arts tickets, small games of chance or smokeless tobacco.
A tax amnesty program drawing hundreds of millions from the rainy day fund and an account that helps doctors pay malpractice premiums were included in the revenue measure.
Pennsylvania's 2009-10 fiscal year began July 1 without a comprehensive tax-and-spending plan in place, although a stopgap measure was passed to pay state workers and fund billions in other state spending.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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