Pa. legislature will soon run out of money if budget impasse drags on

HARRISBURG, Pa. (WHTM) – If Pennsylvania’s budget stalemate drags on much longer, social service agencies, food pantries, rape crisis hotlines and the like will feel the pinch of no state funding.

So will a branch of government at the center of the standoff: the legislature.

ABC27 News has learned the four caucuses will soon exhaust their reserves if there’s not a budget deal within the next month or so. A signed budget is needed to replenish legislative accounts with funds.

Here’s how the system works:

Taxpayer dollars are in the Pennsylvania Treasury, which doles out cash to various state agencies as directed by the budget.

Nearly all of those agencies must return unused money to the Treasury each year. For example, if agency X gets $100 million and only spends $85 million, it would send the $15 million back.

That rule doesn’t apply to legislative caucuses which can keep their extras in reserve. Over the years, House Democrats, House Republicans, Senate Democrats and Senate Republicans have squirreled away hundreds of millions in leadership reserve accounts.

But most of that money is mostly gone after Governor Tom Corbett blue-lined legislative funding last year and there’s no deal yet this year.

House Democrats will run out of money in early September. The other caucuses aren’t far behind.

“We believe that we are good probably until Mid-September,” said Senator Jay Costa (D-Allegheny), the minority leader.

The Pennsylvania Treasury said it is willing to pay legislative staffers if the impasse continues and then deduct it from legislative accounts when the budget is complete. The Treasury is taking this position following a 2009 court ruling that says state worker paychecks should not be held hostage in the event of a budget standoff.

House Democrats agree with Treasury’s interpretation and like the idea of Treasury fronting the money for employee pay until a deal is done.

Senate Democrats aren’t sure, according to Costa.

Republicans, both House and Senate, hate the idea.

“We would not take any money from the Treasury,” said Representative Mike Turzai (R-Allegheny), who wrinkled his nose with disdain at the mere suggestion. “We would get a line of credit. We do not think you should be making use of monies from the Treasury. We think that’s inappropriate.”

Of course, as we just noted, the House takes money from the Treasury every two weeks to make payroll because the Treasury is where the money is.

Critics might find it more inappropriate to use tax dollars to pay the interest on a commercial loan rather than borrowing from the Treasury interest free, but Republicans insist the legislature must be self-sustaining and self-funding.

“We can’t cry ‘separation of powers’ when we have money, and then when we’re out of money not have separation of powers,” said Representative Mike Vereb (R-Montgomery). “I think that’s a key ingredient to the Constitution.”

Vereb added that he thinks it would be against both federal and state law for the legislature to just accept money from the Treasury to pay its bills.

There could also be philosophical problems for the legislature if it just let treasury pay legislative staffers during a budget stalemate, as pointed out by Auditor General Eugene DePasquale (D), who is a former lawmaker.

“It begs the question, do you really need the leadership surplus as high at it is?” DePasquale asked. “If Treasury’s gonna pay them, the answer is no.”

Many observers are shocked at the lack of urgency in budget negotiations thus far. Perhaps the fear of zero dollars by mid-September will get things moving.

“My expectation is, and my hope is, that we will have a budget concluded by the time we would run out of money in the Senate,” Costa said.

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