GOP opts to test budget-balancing plan

Pennsylvania

Pennsylvania

If it fails, the next step is unclear for the House, led by Speaker Mike Turzai, R-Allegheny.

Pennsylvania's House of Representatives returned to the Capitol on Monday for its first session in seven weeks, but a divided Republican majority argued over a new budget-balancing plan and provided no sign that a two-month budget stalemate will end anytime soon.

Despite the so-called taxpayers budget gaining traction in the house, Democratic Gov. Tom Wolf reportedly opposes the Republican plan stating that it would have consequences on a wide range of communities.

Stymied by dissension among Republicans, the Pennsylvania House of Representatives put off preliminary votes Tuesday on measures created to plug state government's $2.2 billion budget gap with money siphoned partly from public-transportation and environmental-improvement programs. Wolf's administration also has said that another $400 million in operating reserves counted in the House GOP plan simply does not exist.

House Republican leaders were considering how to shrink their plan's transfers to win enough support to pass the chamber, backers said.

Since the fiscal year beginning July 1, Wolf's administration has borrowed money from other state funds to keep the state's main bank account above zero. Some Republicans would be satisfied by paring back approved spending by $2 billion, while some Republicans say an income tax increase is necessary to fix state government's entrenched post-recession deficit. The Southeastern Pennsylvania Transportation Authority - the state's largest public transit agency - said it would lose nearly 20 percent of its budget in the middle of its fiscal year, forcing harsh cutbacks across all services and a 20 percent fare increase. However, with tax collections at a seasonal low flow, Wolf has warned that he is out of options starting this coming Friday to make payments on time.

But it also would contribute to an "economic "moral hazard" that effectively increases the long-term risks to the commonwealth's finances", Torsella and DePasquale said.

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