Jul 11, 2016 3 min read

HARRISBURG – Today will be crucial to determining whether Pennsylvania state lawmakers can pass a tax increase to fully fund a $31 billion election-year spending bill, and put a quick end to legal questions over how the state can operate on an unbalanced budget, lawmakers said.

Lawmakers said they would work through Monday night to try to seal an agreement, but gave little detail about their private discussions or their meeting with Democratic Gov. Tom Wolf at his official residence in Harrisburg.

Fueling their urgency was Wolf’s Sunday night pronouncement he would not stop the budget bill from becoming law at midnight Monday, despite tax collections projected to fall hundreds of millions of dollars short of funding it.

It immediately raised concern any delay beyond today would draw another downgrade on Pennsylvania’s already battered credit rating and a lawsuit by conservative lawmakers that could upend the spending bill.

“I think the next 24 hours will tell the tale whether we’re going to have an agreement or whether all sides retreat back to their own corners,” said House Majority Leader Dave Reed, R-Indiana.

Senate President Pro Tempore Joe Scarnati, R-Jefferson, called midnight Monday the “witching hour,” after which lawmakers would increasingly lose the will to take a difficult vote.

“My fear is, as that witching hour comes and passes without appropriate revenues to pay for the budget, it becomes a slippery slope throughout the rest of the year,” Scarnati said.

The scramble followed weeks of discussions in the Republican-controlled Legislature that has failed to produce any sort of agreement to plug holes in the state’s deficit-ridden finances.

Senate Republican leaders Monday evening told their rank-and-file members they have an agreement that they expect to hold together with the House. No details were given, and work was still to be done, senators said.

“It’s hour by hour down there these days,” said Sen. John Eichelberger, R-Blair.

Closed-door revenue discussions revolve around a $1.3 billion package that relies heavily on a $1 per-pack cigarette tax increase, to $2.60 per pack, and an expansion of casino-style gambling that would make Pennsylvania the fourth state to legalize internet gambling.

However, the House and Senate do not see eye to eye on the sprawling gambling legislation, and Wolf clashed with House Republicans over their push to tap off-budget state programs as a one-time source of stopgap cash.

Meanwhile, legislative staff were preparing hundreds of pages of budget-related legislation and another nearly $600 million in aid to Penn State, Temple, Pitt, Lincoln and Penn remained in limbo in the House.

Major legislation sought by Republicans to pare back public-sector pensions and enable charter school expansion could accompany any budget package.

On Monday, credit ratings agency Standard & Poor’s took note Pennsylvania was embarking on its 2016-17 fiscal year without a balanced budget and swiftly warned of further damage to the state’s already damaged credit rating.

“The ability to enact a spending plan for fiscal 2017 in the absence of a balance revenue package would call the strengths of the constitutional balanced budget requirement provision into question,” Standard & Poor’s analysts wrote Monday.