Tax Law

State Net Capitol Journal – Pennsylvania Budget Stalemate Continues

Budget & Taxes

PA Budget Stalemate Continues

Pennsylvania’s Republican-led House and Senate passed an $11-billion stopgap budget last month, seeking to end the state’s nearly three-month-long budget impasse. But as he did on June 30 to begin the budget stalemate, first-year, Democratic Gov. Tom Wolf, vetoed the spending plan, maintaining that it didn’t include the additional funding for education, severance tax on natural gas drillers, or property tax cut swap for higher sales and personal income taxes that he says the state needs.

"Instead of seriously negotiating a final budget that funds education with a commonsense severance tax, fixes our deficit without gimmicks, and provides property-tax relief for middleclass families and seniors, Republican leaders passed a stopgap budget that once again sells out the people of Pennsylvania to oil and gas companies and Harrisburg special interests," he said in a statement.

Republicans, in turn, accused Wolf of intransigence.

"The problem is with the governor," said Sen. Scott Wagner (R). ”I'll be honest with you, I'm tired of taking blame for the budget.... It's Gov. Wolf right now holding everyone hostage."

Wolf and Republican leaders have been negotiating since the veto but are still far from an agreement, with Republicans focused on privatizing state liquor sales and pension reform, and having no interest in any general tax increases.

“There aren’t the votes in this House or the Senate for the broad-based tax increases that the governor wants,” said House Majority Leader Dave Reed (R). (PHILADELPHIA INQUIRER, PITTSBURGH POST-GAZETTE, FOX43 [YORK], BLOOMBERG, ASSOCIATED PRESS, LEXISNEXIS STATE NET)

School Bond Measure Bound for CA Ballot

A $9-billion school-construction bond proposal has qualified for California’s November 2016 ballot, according to Secretary of State Alex Padilla.

“This bond will go a long way to ensure school districts have the necessary resources to create the best learning environments for students,” said Eileen Reynolds of the California Building Industry Association, one of the ballot measure’s backers.

California’s voters have approved about $45 billion in borrowing for education since 1998. But it’s been a decade since the last school borrowing measure was passed. In the last days of the 2014 legislative session, lawmakers attempted to place an education bond on the ballot, but that effort died after Gov. Jerry Brown (D) made it clear he opposed the proposal.

“I think the locals can do it more efficiently,” the governor said when he released a proposed budget in January specifying a limited role for the state in school construction.

The state’s building industry association bankrolled the signature-gathering effort for the new measure, together with the Coalition for Adequate School Housing. And the measure may be one of two high-dollar proposals on the 2016 ballot backed by education groups. The California Teachers Association and other education, health care and law enforcement groups have also proposed an initiative aimed at extending some of the temporary taxes approved by voters three years ago (SACRAMENTO BEE).

Budgets In Brief - October 5 2015

MA Pension Fund Takes Big Hit: MASSACHUSETTS’ state pension fund lost $521 million in value in the past fiscal year, as a result of its holdings in fossil fuel stocks. Boston-based Trillium Asset Management calculated that the Massachusetts Pension Reserves Investment Management (PRIM) fund’s nearly $1.9 billion in U.S. and foreign stocks in the “coal, integrated oil and gas, and fossil fuel exploration and production industries” fell by 28 percent in the year that ended on June 30 (BOSTON GLOBE). * Landmark Education Funding Case in AK: A case before the ALASKA Supreme Court could change the way the state funds education. The case revolves around differing interpretations of whether the state’s Constitution requires municipalities to help pay for schools (ALASKA DISPATCH). * Special Session Surprise in AK:

 As ALASKA lawmakers have been expecting, Gov. Bill Walker (I) called for a special legislative session on October 24 to consider a proposed $55 billion project to build a natural gas pipeline from the North Slope to Nikiski. But the governor’s special session proclamation also included a surprise agenda item: a proposed tax on the natural gas reserves of the companies the state is seeking to partner with on the pipeline project (ALASKA PUBLIC MEDIA, LEXISNEXIS STATE NET). * HI Reaps Windfall from Online Travel Companies: HAWAII has recovered $53.1 million in excise taxes, penalties and interest from online travel companies, including Travelocity, Expedia and Orbitz, that sold hotel rooms, rental cars and other services in the state. The payments resulted from a Hawaii Supreme Court ruling rejecting the travel companies’ argument that they are not subject to Hawaii’s excise tax because they don’t physically do business in the state (HAWAII NEWS NOW).

- Compiled by KOREY CLARK

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