As of today, it appears that budget talks between the Governor and the General Assembly have stalled. Republican legislative leaders say they are ready to start moving a budget this weekend to approve before the fiscal year ends.

The Republicans in the House and Senate continue to look at pensions and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax.

Senate President Pro Tem Joe Scarnati has indicated that the Republican budget would not contain a tax increase and more details will emerge as the budget moves forward. The Republican budget bill would rely on revenue from liquor privatization, and savings from public pension reform, but the proposed budget would not reduce the amount the state contributes to the pension systems. Republicans might also be looking at new recurring revenue by changing how the Commonwealth levies a Gross Receipts Tax (GRT) on Medicaid Managed Care Organizations. The Federal Centers for Medicare and Medicaid Services (CMS) has told Pennsylvania the way the Commonwealth levies the GRT is inconsistent with applicable federal statutory and regulatory requirements. The Commonwealth was given until November 30, 2016, to make the necessary changes to its GRT.

Some additional details of the proposed Republican budget include: no additional dollars to the wait list or the county human block grant program. Please do not panic! While the Republicans will pass a budget by June 30, it has come to our attention that the governor is planning to veto the entire Republican budget. If the governor holds onto this veto pledge, then there will be a late state budget. The governor and Republican leadership will have to go back to the negotiation table to find common ground, because Republicans do not have the required votes to override the governor’s veto. During that negotiation process, RCPA will continue to meet with elected officials to advocate for additional human service funding.

RCPA will continue to update the membership regarding the ongoing budget negotiations. We ask you, your employees, and the families that you serve to contact your legislators and the governor to tell them it is imperative to fully fund human service programs and to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget.

Contact Jack Phillips, RCPA Director of Government Affairs, with questions.