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Pa. budget part 2 shuts out small business relief

I am sure that small-business owners, especially those in the restaurant and hospitality fields, are legitimately angry and scratching their heads over our legislators’ passage of a partial state budget that has little in it for them.

This comes after a lot of posturing the last few months about how these stalwarts of our statewide economy were taking it on the chin because of the restrictions imposed by the governor’s and state health department’s offices in the wake of the global COVID-19 pandemic.

Restaurants, in particular, were ordered at first to have no indoor food service, then they were allowed but at 25% capacity, and now at 50% capacity but with alcohol curfew restrictions. During the warmer months, many restaurants served patrons outside, which helped make up for some of the lost business, but as the temperatures have fallen off, outdoor dining is no longer as desirable or comfortable.

Republicans have filed suit against the Wolf administration because of its reimposing emergency orders twice after launching them last spring. They argued that these measures were sucking the lifeblood out of the hospitality industry and that without help countless restaurants would go out of business.

Yet, the Republican leadership, with agreement from the governor’s office, engineered an $11 billion budget to get it across the finish line last week before they went on Thanksgiving break and before the end of the current legislative session next Monday, Nov. 30.

Both the Republicans and the governor are kicking the aid can down the road, expecting that Congress and either the remnants of the Trump administration or the incoming Biden team will strike a deal that will include help for these hurting businesses.

It’s a calculated risk, because not only is there a possibility that the legislative deadlock in Washington will continue, even with a new administration, which is not exactly going to hit the ground running because of the president’s reluctance to concede defeat, but it also means that some of these businesses that are hanging on by a thread may not be around by then.

The budget, which received an infusion of $1.3 billion in as-yet-unallocated federal CARES Act assistance for dealing with the pandemic passed along party lines - 104-97 in the state House of Representatives and 31-18 in the state Senate. There was one notable exception. Rep. Jerry Knowles, R-Schuylkill-Carbon, broke with the majority and voted “no.”

Democrats, including Sen. Lisa Boscola, Northampton and Lehigh, and Mike Schlossberg and Peter Schweyer, Lehigh, opposed the budget plan, saying that it does nothing for businesses, schools, hospitals and hazard pay for essential workers, but Republicans, including Doyle Heffley, Carbon, defended the action as fiscally responsible in light of the most devastating pandemic in a century and one that is just hitting its stride by breaking records almost daily for the number of cases and hospitalizations.

Knowles’ no vote had to do with the total budget figure for fiscal 2020-21. Lawmakers passed a piecemeal $25.8 million budget in May while waiting for more federal government support which, of course, has not yet come.

The projection at that time was for a $6 billion deficit primarily because of lower tax and fee revenues stifled by the novel coronavirus’s impact. Since then, budget officials were pleasantly surprised to see revenue collections come in $2 billion higher than expected.

“While many Pennsylvania families and small businesses are struggling to make ends meet, I could not vote yes to an increase in spending of almost 4%,” Knowles said. “At a time when Pennsylvanians are struggling to save every penny they have accumulated, the state government should follow the same course of action. I fear that the increase in spending will lead to future tax increases that Pennsylvanians cannot afford.”

Knowles acknowledged that the budget “has some positives.” Among them, he said, taxes will not be raised, education will be fully funded and there will be funds for public health and safety measures for front-line workers.

Heffley said that at a time of so much uncertainty, the Legislature chose not to place a heavier burden on Pennsylvanians. “We were able to accomplish that goal by transferring money from several special funds, including the Rainy Day Fund, which was created for that reason,” Heffley said.

Heffley said legislators wanted to place Pennsylvania on “firm financial footing as we continue down the road of economic recovery.”

In announcing that he will sign the bill into law, Gov. Tom Wolf said, “COVID-19 has left Pennsylvania in a difficult financial situation, and this budget protects against furloughs and deep cuts to critical programs.’’

Although the budget holds the line on taxes, certainly good news for strapped taxpayers in these lean times, it also means that there will be no increases for education and many other critical programs.

Democrats are warning that the use of CARES money to balance this year’s budget will make the creation of the 2021-22 budget (due by June 30, 2021) that much more difficult without additional federal help.

By Bruce Frassinelli | tneditor@tnonline.com