MEMO: Governor Wolf’s Fiscal Code Veto

March 23, 2016

SUBJECT: Governor Wolf’s Fiscal Code Veto
TO: Interested Parties
FROM: Jeff Sheridan, Press Secretary
DATE: March 23, 2016

As Governor Wolf said, he will allow the general appropriations and non-preferred appropriations bills to become law, as is, without his signature. While the governor believes it is time to move on from the protracted 2015-16 budget impasse because this will allow for funding to go out to schools and other services in the short term, we still face enormous problems that this budget does not even pretend to address.

Nothing has changed: the math in this budget does not work. Next fiscal year already has a $2 billion structural budget deficit that this budget does nothing to address. Ratings agencies and the Independent Fiscal Office have all agreed that Pennsylvania is facing a massive structural budget deficit. If left unaddressed, the deficit will force cuts to schools and human services, cause devastating credit downgrades that will cost taxpayers millions, and increase property taxes for our senior citizens. We have not yet faced this reality and balanced our budget with real, sustainable revenues.

The governor will veto the fiscal code because it contains unconstitutional provisions, guts important environmental regulations, and tries to establish legislative authority over issues that fall under executive jurisdiction. The Wolf Administration will work to distribute the funding provided in the general appropriations bill in the most appropriate manner possible, just as the administration did in December when the governor signed a partial general appropriations bill that was without an accompanying Fiscal Code because the legislature did not pass one.

Below are a few of the many problems with the Fiscal Code:

Section 1741.1-E. Abrogates and restarts the process for the Chapter 78 natural gas regulations relating to conventional drillers. These regulations are currently being considered by IRRC and have been in process for five years and have generated over 30,000 public comments, the overwhelming majority of which have been supportive. This would be a significant setback to the DEP’s efforts to enhance environmental safeguards for natural gas development.

Section 1722-L. (17.1) Perpetuates a Basic Education Funding distribution, which is one of the most inequitable funding distribution formulas in the nation because the devastating cuts from 2010-11 are not restored.

Section 1723-E. Requires that any Clean Power Plan drafted by DEP be submitted to the legislature 180 days prior to submission to EPA for approval: thereby allowing either chamber to unilaterally disapprove the plan, causing DEP to have to amend the plan as directed by the legislature. This process is both an unconstitutional one chamber veto, and an unwarranted intrusion into executive authority.

Section 1723-L (17.2) Reversing a prior distribution of the Ready to Learn Block Grant monies by withholding Basic Education Funding dollars if the amount of Block Grant funding already distributed to school districts under the 2015 General Appropriation Act exceeds the amount authorized in the bill. This would result in unwinding of funding already allocated to some of the commonwealth’s poorest districts like Philadelphia and Chester Upland, and would force some schools to close this year.

Article XVII-E.2. Pertains to PlanCON and authorizes up to $2.5 billion in new bond debt that would be prohibitively costly to issue due to inflated debt costs resulting from the lack of any concrete steps in the current budget to address the structural deficit.

Section 1719-E. Prohibits the Secretary of DCED from certifying that the Pittsburgh Intergovernmental Cooperation Authority is no longer necessary until Act 47 oversight is terminated.

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