House Republican leaders told members Thursday they won't support a Senate-crafted revenue package to cover Pennsylvania's new budget.
“The amendments to these bills were neither agreed-to, nor shared with the House in advance of the committee meetings, so we certainly have no intentions to rubberstamp these bills,” the House GOP leadership team told members in a memo.
“From the beginning, when we passed a full and balanced budget on April 4, our goal was to protect the wallets of taxpayers. Make no mistake; that is still where our caucus stands,” the memo continues. “With respect to the process moving forward, it is going to take some time to review what is actually contained in each of these proposals — for both our caucus and the Democrats.”
The state Senate narrowly approved a revenue package Thursday to eliminate a $2.2 billion budget deficit that includes borrowing and hundreds of millions of dollars in tax increases, including on Marcellus shale drilling, consumer utility bills and online purchases.
The package aims to balance a bipartisan $32 billion spending plan lawmakers sent to Gov. Tom Wolf in late June.
The plan would borrow $1.3 billion against Pennsylvania's annual share of the 1998 multistate settlement with tobacco companies, a proposal House Republicans rejected last week.
Wolf, a Democrat, has expressed support for the Senate-crafted revenue plan.
House GOP leadership said the Appropriations Committee will review the proposals. House members are on six-hour call.
Senate Majority Leader Jake Corman, R-Centre County, said on the floor Thursday that lawmakers held the line on new taxes as long as they could but needed more revenue to avoid a spending freeze on some government spending.
Sen. Scott Wagner, R-York County, who is running for the GOP nomination to challenge Wolf in next year's election, blasted the legislation's tax increases on “hard-working Pennsylvanians” and said state agencies are wasting money.
“The only winner is the beast that is state government,” he said.
The biggest chunk of new revenue — $405 million — comes from new or higher taxes on consumers' natural gas, electric and phone bills. Natural gas utility bills would include a 5.7 percent tax. Electric bills would increase 0.5 percent to 6.5 percent, and phone bills will increase 1 percent to 6 percent.
The severance tax would generate $100 million a year. Gas companies would still pay the existing impact fee, which helps funds some state government programs and local grants to communities in the Marcellus region. Senate lawmakers approved loosened environmental permitting rules as a concession to the oil and gas industry, which riled environmentalists.
The package also relies on $200 million from a massive gambling expansion which is still under discussion by the House and Senate.
“It's not what I want. It's not perfect, but I recognize that there are things we have to do as leaders and individuals to try to reach a compromise,” said Senate Democratic Leader Jay Costa, D-Forest Hills.
Pennsylvania could see a credit downgrade without a balanced budget, which could increase borrowing costs. It could also force Wolf to freeze some government spending, potentially affecting schools, grant programs, tax credits and counties that administer social service programs.