Jul 6, 2015 4 min read

It’s been almost a week since the new fiscal year got under way in Pennsylvania, and there’s no budget that’s emerged from Harrisburg.

This should surprise no one. Republicans strengthened their majorities in the state House and Senate last year, and they believe they have the clout to get their way on what the commonwealth’s policy priorities should be over the next 12 months. At the same time, Democratic Gov. Tom Wolf believes he holds the whip hand, having decisively vanquished Republican governor Tom Corbett last November. Talks were due to resume Monday, but it’s possible this standoff could stretch into next week, next month, into the fall or beyond. The last time a newly arrived Democratic governor clashed with a Legislature controlled by Republicans over the budget, Gov. Ed Rendell finally signed off on a deal just before Christmas in 2003.

Even though the two sides are pretty far apart, we certainly hope the impasse doesn’t extend into the holiday season, and nor should anyone else. While state employees will continue to get their paychecks on time, agencies that rely on state funding, such as early childhood centers, schools and universities, would be deprived of funds, as would county governments and various nonprofit organizations that provide social services. A long stalemate would perhaps be entertaining for those who closely observe the machinations and shenanigans in Harrisburg, but it would have real-world conseqences for students, the needy, the elderly and many other Pennsylvanians.

It’s time for the governor and his opponents in the Legislature to engage in some horse-trading.

It was probably inevitable Wolf would veto the budget the General Assembly sent him last week. With Wolf having successfully campaigned on a promise to significantly increase education funding after years of cuts, with some of that money coming from a severance tax he wants to impose on natural gas production, it was not likely he would accept a proposal that had no severance tax and school funding far short of his stated target. Moreover, the budget contained none of the tax increases Wolf wants in order to help close the state’s budget deficit. While we have some concerns on the extent of Wolf’s proposed tax increases and the number of previously exempt items that could be included, getting the state’s fiscal house in order and investing in education after years of parsimonious budgets are commendable goals.

Here’s a suggestion that could nudge the two sides closer together: The Legislature should give Wolf a severance tax, while the governor should reconsider the proposal he vetoed last week that would end the outmoded system of alcohol sales and privatize the state’s liquor and wine sales.

Despite the protestations of the energy industry and its supporters a severance tax would chase drillers away, there’s little chance that would happen. Where would they go? New York, which banned fracking? Maryland, which did likewise? Ohio, where Republican Gov. John Kasich wants a higher tax than the one the Buckeye State already has? The gas industry is here to stay. As long as the impact fees that support communities where drilling takes place are retained, a severance tax is something the industry can afford and Pennsylvania needs.

And the commonwealth also needs to end its stranglehold on the sale of alcohol. In his veto, Wolf said privatizing the state stores would drive up prices and limit selection, but most evidence points to just the opposite happening under privatization. More than anything else, Wolf’s veto was probably designed to protect the jobs of unionized employees at state stores.

Both sides giving ground on these issues would be a way to nudge Pennsylvania in the right direction.