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Pa. Senate OKs spending, tax bills to end stalemate

HARRISBURG — The state Senate approved key spending and tax bills Tuesday in a bid to pressure the House to go along with its plan to end Pennsylvania's long budget stalemate.

However, partisan friction and criticism by House Democratic leaders of spending on discretionary grant programs ensured more twists in the three-month-old battle to settle the state government's multibillion-dollar, recession-driven shortfall.

The Senate's $27.8 billion spending plan passed the Republican-controlled chamber with overwhelming support shortly after Gov. Ed Rendell met with top lawmakers to try to resolve remaining differences in the politically divided Legislature.

"Certainly it's ultimately a compromise, and when you have a compromise, of course there are things that you like and things you don't like," said Senate Appropriations Committee Chairman Jake Corman, R-Centre. "But it does meet the needs of Pennsylvania and it does make an historic ... contribution to and investment in education."

A comprehensive state budget is more than three months late, the nation's longest delay.

The House adjourned Tuesday without taking action on any major budget legislation, and House Democrats said they hoped to have a response ready today, a day before the stalemate hits its 100th day.

"We really want to bring this to a resolution," said Paul Parsells, chief of staff for House Speaker Keith McCall, D-Carbon. "We don't want to play games."

House Democratic Whip Bill DeWeese, D-Greene, said he believed tempers were cooling after a previous budget deal fell through late last week.

Overall, the Senate's budget plan would cut spending by more than 1 percent from last year but boost spending on instruction and operations of public schools by $300 million, or 5.7 percent, a provision insisted on by Rendell. Some House Democrats complained that the Department of Environmental Protection would take a 27 percent hit at a time when it is charged with ensuring that a fast-growing gas drilling industry does not pollute waterways.

Spending would be supported by nearly $500 million in higher taxes on businesses that pay the capital stock and franchise tax, as well as on sales of cigarettes and little cigars. The state also would raise money by leasing land in state forests for natural gas drilling and legalizing and taxing table games at slot-machine casinos.

The spending bill passed the Republican-controlled Senate 43-6, while the tax bill passed 35-14.

Rendell has said he supports the approach, but House Democrats did not sign off on all details and planned to strip $12 million in discretionary grant programs from the Senate's budget.

Meanwhile, major disagreements between the House and Senate continue to dog table games legislation. And partisan disputes over the voting process flared, as well: House Democrats say budget-related bills sent over by the Senate could trigger House rules that require waiting several weeks for final votes.

With hundreds of millions of dollars in state subsidies held up by the stalemate, the private organizations and businesses that deliver many of Pennsylvania's social services to the poor are closing or laying off workers.

The Senate's votes come less than a week after the collapse of a previous agreement between Rendell and leaders of the House Democrats and of both parties in the Senate.

Rank-and-file House Democrats opposed the plan's proposal to tax small games of chance fundraisers and tickets to live stage performances and cultural sites, such as parks and zoos. Instead, they replaced those with taxes on natural gas extraction, cigars and other tobacco products — all taxes opposed by the Senate.

To resolve it, the sides appear to have agreed to leave out all four taxes and make further spending cuts.

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