Budget deal in Pa. prompts a divide

Before vote, lawmakers work on the fine print

HARRISBURG (AP) — Defending a handshake agreement to end Pennsylvania’s long state government budget standoff might be as complicated as it was to reach the deal.

More than a week after the deal was reached by Gov. Ed Rendell and top Republican and Democratic lawmakers, proponents are gamely defending it while lobbyists seek changes and rank-and-file lawmakers brim with questions.

Legislators have major wrinkles to iron out and another week or more while aides write the fine print of the sprawling, puzzlelike agreement into legislation before it reaches a vote. All sides say they plan to stick to the deal and, for the most part, have kept their skirmishes behind the scenes while they work to sew votes together.

Legislative leaders are “steeling themselves for the inevitable criticism that will come from within their caucuses and from the public, but they understand the responsible thing that needs to happen and I think they’ll do the right thing,” said Rendell’s chief of staff, Steven Crawford. “All of Pennsylvania is waiting for them to do the right thing.”

Senate President Joe Scarnati said criticism is to be expected since no solution to an economic disaster, such as the state’s multibillion-dollar revenue shortfall, is going to be painless. However, he acknowledged the downside to announcing a controversial deal at least two weeks before the entire package emerges for a final vote.

“That’s why we have seen, in years past [under] previous leaders the deal was cut late in the day, and the bill was run late in the evening,” Scarnati said. “This is an open process ... and people are seeing what it is.”

At stake is ending Pennsylvania’s status as the only state in the union still fighting over its budget, which was due July 1. The nearly $28 billion deal announced Sept. 18 avoids an increase in the state income or sales tax rates and cuts overall spending by about 1 percent, but leaders are still trying to settle how all of the money will be spent.

With a massive shortfall to fill, the budget-makers’ search for revenue plumbed the far corners of the state’s dedicated funds, natural resources, tax exemptions and more. The deal would:

UDivert about $50 million a year in slot-machine gambling revenue from the state’s horse breeders.

UCount on $115 million over two years from leasing more state forest land for gas drilling.

USlap a sales tax worth about $120 million onto the price of admission to music concerts and other performing arts, museums, historical sites, zoos and parks.

URaise the capital stock and franchise tax paid by some businesses, a move valued at about $300 million this year.

ULegalize table games at casinos, a move valued at $200 million this fiscal year.

UTap more than $800 million in reserves previously meant to help doctors and hospitals pay their medical malpractice insurance premiums.

USaddle fire companies, veterans groups and various other clubs and nonprofits that hold liquor licenses with a 20 percent tax on small games of chance to raise about $20 million.

An outcry has resulted.

Environmentalists and sportsmen’s groups accused budget- makers of selling out the state’s public forests to multinational gas-drilling companies, while letting the drillers escape without being taxed.

Public health advocates and leaders of the state’s arts and culture community were aghast that sales of cigars, loose tobacco and smokeless tobacco maintained an exemption, but tickets to the opera, ballet and small theater groups did not.

The Pennsylvania Medical Society accused the state of taking surplus money in a medical malpractice fund that resulted from excess premiums paid by physicians, hospitals, nurse midwives, podiatrists and nursing homes.

Horse breeders warned of job losses in the agricultural sector if racing days and track purses suffer from a loss of slots money.

Antigambling activists questioned the wisdom of underwriting state services by expanding gambling, thus adding to the social ills that state-funded services must address.

The agreement still requires legislative approval, and rank-and-file lawmakers are waiting for more information, sometimes impatiently, while fielding angry phone calls in their district offices.