- Associated Press - Monday, January 26, 2015

HARRISBURG, Pa. (AP) - The Republican floor leader in the state House said Monday that property tax reform, public pensions and liquor privatization need to be in the mix as budget talks get underway with the new Democratic governor.

Majority Leader Dave Reed told the Pennsylvania Press Club that the education debate should focus on whether there is sufficient funding, how the money is distributed, whether there’s a better alternative to school property taxes, how to lower pension costs and potential changes to how schools operate.

“We have a responsibility to make sure that that discussion is not just focused on the quantity of the dollars we spend,” said Reed, R-Indiana. “Certainly that’s a part of the discussion, but we’ve also got to focus the discussion on the quality of the product we’re producing.”

Reed this month circulated to fellow House members a co-sponsorship memorandum that said he wants to offset $4 billion annually in local school property taxes by increasing the personal income tax from its current rate of 3.07 percent to 3.7 percent and adding 1 percentage point to the state’s sales tax, now 6 percent in most of the state.

Reed told the press club that he hopes the House will advance a medical marijuana bill that will lead to productive negotiations with the Republican-controlled Senate and newly inaugurated Gov. Tom Wolf.

“We’ve got too many kids and too many citizens in general who can potentially benefit from the use of medical marijuana,” Reed said.

Asked about full legalization, he said that he preferred to take “one step at a time” and that discussion on that can follow the medical marijuana debate.

Reed also said a grand jury may have gone too far in recommending changes to the state law preventing journalists from being compelled to reveal confidential sources.

“It’s one of the fundamental tenets that we have for protection of our journalists, and I think certainly, maybe the grand jury went a little bit too far in wanting to weaken those provisions and I think once you start down that slippery slope it’s a very dangerous precedent to set,” he said.

He said the House would continue to pursue a proposal to decrease the number of state representatives, now at 203.

Wolf faces a $2 billion-plus deficit while he and his aides work to develop what will be his first budget, with his budget address expected to be presented in early March.

Reed said changes among the state’s elected leadership give him hope that pensions, liquor privatization and public-sector union law changes could make ground despite now passing under a Republican governor and Republican-controlled Legislature.

“You have a different set of players in the House, Senate and in the governor’s office,” Reed said. “Secondly, big public policy agenda items don’t always happen overnight.”

Divided government, Reed said, could be good because it “brings both sides of the equation to the table.”

Fellow House Republicans elected Reed majority leader to replace Mike Turzai, who was chosen to succeed retiring Speaker Sam Smith. Reed has led his caucus’ election efforts for the past several election cycles.

Republicans hold a 119-84 majority margin in the House. They also control the Senate, 30-20.

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