Pennsylvania lawmakers over the weekend advanced a $30 billion budget for fiscal 2016 that, barring a compromise, appears headed for a veto by Gov. Tom Wolf.
Republicans dominate both branches of the legislature. Wolf, a first-year governor, is a Democrat.
"All this appears to be the opening gambit in what appears to be a protracted legislative process," said Richard Dreyfuss, an adjunct fellow at the Manhattan Institute for Policy Research.
The Senate will reconvene Tuesday for a final vote on the budget. The new fiscal year starts the following day. Court rulings have allowed the state to continue to run essential services until a full spending plan is passed.
On Sunday night, separate Senate committees approved a House of Representatives-supported alternative to Wolf's budget and a measure to privatize the state-run liquor store system. Also part of the package is a measure to move certain new hires from a defined-benefit plan into a defined contribution, 401(k)-style plan.
The House passed the budget 112-77 on Saturday.
Pension changes involve plan design and do not address the state's roughly $50 billion unfunded liability that prompted downgrades last year from all three major bond rating agencies. Moody's Investors Service rates the commonwealth's general obligation bonds Aa3. Fitch Ratings and Standard & Poor's rate them AA-minus.
Dreyfuss, a Hummelstown, Pa., actuary and former benefits coordinator at Hershey Foods, called the underfunding "an item of specific concern identified by credit rating agencies and other financial professionals."
Wolf in a statement on Sunday night accused Republicans of gimmickry, saying the spending plan shifts more than $563 million in current-year expenses to next year's deficit and would create a $2.1 billion structural budget deficit by 2016-17. He also said it ignores more than $300 million of recent cost and revenue adjustments, including $100 million to pay for lottery funded programs for seniors.
The liquor privatization bill cleared the Senate's law and justice committee 7-4. Supporters say the bill would raise an additional $220 million for the budget. Even if the full Senate approves it, Wolf is expected to veto the measure.
Sen. Vincent Hughes, D-Philadelphia, said the GOP allocated only $120 million for education funding - well short of the $400 million Wolf had sought to restore cuts made by his predecessor, Republican Tom Corbett - and that skipped payments would offset much of the truncated amount.
"It seemed like the Corbett administration reappeared in this budget proposal that the Republicans put together," said Hughes.
