- Associated Press - Friday, December 11, 2015

Democratic Gov. Tom Wolf, the Senate and House Democrats have largely agreed on a budget package to end the state government’s 5-month stalemate. The House’s Republican majority is currently considering it. Here is a look at the highlights:



The appropriations bill passed by the Senate authorizes a spending plan of $30.8 billion, a 6 percent increase over last year’s $29 billion approved budget. It also authorizes another $170 million in spending that will go on last year’s books. It pushes over $500 million in payments for school construction projects, county child welfare services and school employee retirement costs into the following fiscal year.



Senators say the budget agreement with Wolf calls for new revenue of $600 million-plus - or more than $1.2 billion over a full year - from new sources of money, all or nearly all of it from tax increases. However, the Senate and the Wolf administration are awaiting an agreement with the House GOP before making a tax plan public.



The Senate appropriations bill includes $365 million to be distributed to public schools for operations and instruction, a 6 percent increase. An education policy bill would impose more ethics and open records requirements on charter schools and permit new avenues for them to open, particularly in Philadelphia, while distributing about $6 billion to school districts under a one-year compromise formula. A formula approved in June by a commission of lawmakers to distribute state aid to schools would take effect next year, under the bill. It also would impose limits on charter school reserves, postpone the use of tests as a public school graduation requirement until the 2018-19 school year and authorize borrowing of at least $2.5 billion to pay the state share of school construction projects. It also calls for a two-year moratorium on accepting or approving new building or constriction project applications.



The Senate legislation would create a mandatory 401(k)-style benefit for state government and public school employees hired in the future. It would keep but reduce the traditional pension benefit for future employees and reduce future pension benefits of current employees. The Senate legislation would refinance the pension debt to lower school and state payments over the next two years - about $170 million combined next year - but increase longer-term costs. About one-third of the states already administer a mandatory or optional 401(k)-style retirement benefit for employees, according to the National Association of State Retirement Administrators. The legislation is not accompanied by an independent actuarial note that tallies the fiscal effect of the changes on the two pension systems, although the Senate estimates that it lowers payments by about $2.6 billion in the coming decades.



Senate legislation would allow about 14,000 holders of takeout beer licenses - including restaurants, bars, hotels, supermarkets and delis - to purchase licenses to sell up to four bottles of wine to a customer. Beer distributorships are not included in the bill, and selling hard liquor would remain under the exclusive jurisdiction of the approximately 600 state-owned stores. Republican backers say they expect supermarkets or big-box stores to get into the business by purchasing existing takeout beer licenses from the current holders or the state. The bill also would allow state-owned stores more freedom to set hours, sell lottery tickets and market products to improve profitability. And it would allow casinos to serve liquor, wine and beer around the clock; currently casinos can serve it for 19 hours out of the day. Licenses start at $1 million for the first year. It also would allow wineries to ship its product directly to consumers in Pennsylvania.

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