Capitolwire: Restore PA to be pushed off to the fall, minimum wage hike seems unlikely as part of budget, which could start seeing movement the week of June 17, says Corman.

PA GI Bill, PA Farm Bill could get done before summer recess, adds the Senate Majority Leader, though a “reasonable” budget spend total – which Corman again said will be less than Wolf’s February proposal – still needs to be reached.

By Chris Comisac
Bureau Chief
Capitolwire

HARRISBURG (June 5) – Gov. Tom Wolf has said on multiple occasions his Restore PA proposal isn’t tied to the state budget, and it appears that will indeed be the case this month, as legislative Republican leaders don’t plan to consider the proposal until the fall, at the earliest.

“It’s not linked to the budget – the Governor didn’t link it to the budget, as far as a budgetary request – and we’re not going to address it this month,” Senate Majority Leader Jake Corman, R-Centre, during a late Tuesday afternoon interview with Capitolwire, said of the $4.5 billion infrastructure borrowing plan, with the borrowing costs to be paid by a new severance tax proposal.

“To me, this whole Restore PA thing is more about him [Wolf] getting a severance tax” than it is about infrastructure, said Corman.

“It’s not been vetted yet, and we’re certainly not going to create a revenue source that could be a WAM [walking around money] platform, without knowing how this money is going to be spent,” Corman said, who later said, “the whole issue is off for now” while the Legislature explores other options.

Wolf has campaigned across the state in recent months on behalf of the plan, but the Legislature’s majority Republicans, for the most part, have maintained their opposition to a severance tax, which hasn’t gotten much traction during the four-plus years Wolf has been governor, though some Senate Republicans helped to pass a severance tax in an effort to find a compromise to end the 2017-18 state budget impasse (a proposal that failed to win House approval).

“We’re going to continue to talk about Restore PA, and we’re open to feedback from anyone,” said Wolf spokesman J.J. Abbott on Wednesday in response to Corman’s comments.

Noting that a significant part of Wolf’s public relations blitz has focused on using Restore PA money to expand broadband, Corman said, “It’s a great need and he [Wolf] has identified the need, but, unfortunately, the proposal is very specific on the tax he wants to levy – which, obviously, is his crown jewel as he’s been trying for five years to get it – but it has very little specifics on how the broadband would be deployed and how we’d get the private sector involved with this.”

Abbott said the administration has had conversations with plenty of stakeholder groups, and will continue to do so. He also noted Restore PA legislation would soon be introduced [EDITOR’S NOTE: House Bill 1585 and Senate Bill 725 were introduced on Wednesday, though they were not yet available on the General Assembly’s legislative website on Wednesday afternoon].

Corman said the idea of singling out one business or industry to pay for something beneficial to the whole state, like broadband, doesn’t make sense, “we, as a commonwealth, should be supporting this initiative.”

“It’s a very complicated issue that’s going to take significant private sector investment,” said Corman, explaining that back in the early 2000s, much of the available Internet connectivity was accomplished through telephone companies, which were governed by the state’s Public Utility Commission.

“Because of PUC control, we could do flexible rates for them [telephone companies] to get them to do broadband,” said Corman. “Well that was DSL [Digital Subscriber Line, which offers broadband connectivity, but at far slower speeds than are available from other sources], and nobody wants DSL now.”

To accomplish higher speeds, Corman said “you’re talking cable, you’re talking wireless, and that’s done by the private sector which we don’t regulate.”

“And it’s very costly in deployment, and it’s very costly to maintain, and nothing in the Governor’s plan details how he’s enticing them to get involved with this,” Corman continued. “I’ve spoken to several of the major providers and they have had zero-to-little contact with the Governor’s Office on this.”

“It’s not ready at this time, so it’s something we have to push to the fall, at least, and spend the summer working on it,” as well as a Senate Republican plan, said Corman, who indicated his caucus doesn’t plan to wait on Wolf for details that might never come, since broadband deployment is an important issue.

He noted that some Senate Republicans have suggested an alternative – an infrastructure plan supported by revenue from lifting restrictions on gas drilling underneath state-owned forest land – but Corman said that’s not the Senate GOP Caucus’ plan.

The Senate Majority Leader said he’d like to work with the seven local development districts (LDDs) in Pennsylvania, which he noted have been working for a few years on developing and rolling out their own rural broadband plan.

“I think that developing plan has some merit to it, but, again, it needs some work, which makes the whole issue more of a fall issue than a this-month issue,” said Corman, who later added, “I’m not saying it will get done this fall … if he [Wolf] has more details this fall, then it’s a conversation we’ll have.”

Abbott said the administration welcomes hearing other proposals from the Legislature.

A minimum wage hike, for which there was a rally in the state Capitol Rotunda on Tuesday, and which has been linked by some to the budget, also appears to be trending toward a discussion at a later date, as both sides in the issue are, again, waiting to hear from the other.

“I haven’t had any conversations with the administration regarding the minimum wage,” said Corman.

He noted he said this past February that if Wolf were to offer a “reasonable” minimum wage proposal, he’d be willing to have a conversation about it, but he pointed out the Governor’s current proposal remains “unreasonable, and something we wouldn’t even consider.”

“That has not come forward; they have not reached out to talk with me about minimum wage,” said Corman. “So, I’m still in the same position I was back in February.”

When asked if he thinks a minimum wage conversation could begin and be finished before the state budget is completed this month, Corman responded: “I don’t have an idea where they are on how reasonable they want to be … if they want to come and have a conversation that’s maybe a cost-of-living adjustment, that’s something we can discuss, but I’m waiting for them to come forward.”

“At this point, it’s getting late” to get something done before the budget is completed, acknowledged Corman.

Abbott said the administration has made their position known, with the Governor’s minimum wage proposal announced in February as part of his FY2019-20 spending plan. The administration is waiting to see a proposal from legislative Republicans.

“Once we know what they’re willing to consider, then we can start negotiations,” said Abbott.

As for when the FY2019-20 state budget might be completed, Corman said it’s possible, at least at the moment, things could be done and dusted sometime during the week of June 17, but until the votes have been taken in the General Assembly, things are always subject to change.

“You never know,” said Corman. “Would we like to be doing it that week? Sure.”

“I’d like to have it done next week if I could, but that’s not likely,” said Corman, adding that things still have to develop, and depending on that, staying beyond the week of June 17 is still a possibility.

He noted House and Senate Republican leaders are, for the most part, on the same page with regard to the budget – though there are details to still be worked out – but there have been no high-level discussions between legislative GOP leaders and the Wolf administration as yet, only staff-level meetings. Those higher-level discussions are expected “soon,” said Corman.

Abbott confirmed there have been several productive staff-level meetings, but leader-level meetings have not yet occurred.

While indications from the GOP suggest a lot of Wolf’s larger budget-related proposals might not factor into the final product, Corman said some of the smaller ticket items have a chance to make their way into the enacted budget, assuming they fit into the final budget spend total.

Some of those items include the Pennsylvania GI Bill, with the House and Senate having passed their own bills; and the PA Farm Bill, Republican and Democratic bills reflecting Wolf’s proposal which the House on Wednesday advanced from committee. The Senate has already passed its own agriculture-related legislation.

Corman said he thinks the GI Bill can get to Wolf’s desk before the General Assembly’s post-budget summer recess, but he indicated there’s still some more work to be done on the agriculture bills, though he expressed the hopeful intention – which was echoed by House members on Wednesday – of getting those done before the summer break.

“He zeroed out the current agriculture programs and then proposed to spend money on other agriculture programs,” stated Corman. “Clearly we’re going to have to go back and restore those things, as we’ve had to do in the past, and after that, see what we can do with those new initiatives.”

“I’m not going to fund his [initiatives] and then have to figure out how to fund ours,” said Corman. “I’m going to fund ours first.”

“Clearly, we’re all supportive of agriculture in our caucus,” continued Corman. “It’s something we want to do, but we’ll have to get to a reasonable [budget] spend number that includes that.”

And what about that spend number? Abbott said the administration has yet to be given a spend figure by legislative Republican leaders, so they’re waiting for the GOP to reach agreement between the two chambers, which would allow budget negotiations to ramp up.

Corman says his caucus hasn’t moved from the position he and other GOP legislative leaders expressed in early May while talking about the better-than-expected revenue filling the General Fund this year.

“It’s going to be less than what the Governor asked for,” said Corman. Wolf’s Fiscal Year 2019-20 budget proposal released in February asks for a total spend of $34.1 billion. However, there appears to be hundreds of millions of dollars of proposed spending not reflected in the proposed General Appropriations spending lines, in addition to a roughly $500 million supplemental appropriation request to cover unbudgeted costs from the current FY2018-19 enacted last June.

Corman did say coming up with a “reasonable” spend number is being made difficult by the FY2018-19 supplemental request and additional adjustments made by the administration to the FY2019-20 proposal, which, according to Corman, “make it a heck of a lot more spending than he originally proposed” in February, with much of those increases coming in human services budget lines.

“He’s going to have to make a decision: does he want money for human services or does he want money for education?” said Corman of the Governor. “We’d rather spend it on education.”

Arguing Wolf didn’t account for the additional FY2018-19 spending during the year the money was spent, Corman said the Governor “is going to have to look to some of his lines [in the FY2019-20 budget] to make room for it.”

As for the prospective surplus, which some state lawmakers recently have been suggesting could, at least in part, be used for something other than covering FY2018-19 unbudgeted expenses and increasing the state’s Rainy Day Fund, Corman said his caucus, as he stated in early May, still plans to focus the money on balancing the FY2018-19 budget and addressing the state’s budgetary reserves – something Wolf has indicated to be a priority as well.

“We’re not going to spend like drunken sailors, using up all the surplus, and then wake up with a big hangover and a huge budget hole,” said Corman.

Questions, please contact RCPA Director of Government Affairs Jack Phillips.