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First Posted: 6/6/2014 The annual state budget battle &#8212; played out in late June each year &#8212; is often contentious. But this year, with a first-term Republican governor behind in the polls for reelection and state revenue falling below expectations, relations between Republicans and Democrats are particularly volatile.
For his part, Gov. Tom Corbett&#8217;s public wish list makes liquor sale reform&#8212; an issue he said has &#8220;been waiting on a solution for decades&#8221; &#8212; resolved in the new 2014-15 state budget.
Specifically, he wants to sell off the state-run stores to raise revenue and get the state out of the liquor business, a plan most Democratic state officials have long opposed. The governor said Pennsylvania&#8217;s liquor laws bear closer resemblance to prohibition-era regulations than contemporary statutes.
Meanwhile, many Democratic lawmakers &#8212; including ranking members from Luzerne County &#8212; have been clamoring for a severance tax on natural gas extractions, something Corbett opposes. Pennsylvania is the only major drilling state that does not tax the gas that&#8217;s extracted and processed.
Tom Wolf, Corbett&#8217;s Democratic opponent for governor in November, has been making the rounds to garner support for an extraction tax.
With other costly issues like education and human services funding also looming, political observers say it&#8217;s unlikely the state House of Representatives, the Senate and the governor will agree on a $28 billion budget when the fiscal year ends June 30. Previous showdowns have triggered a shutdown of some services.
With that backdrop, The Times Leader checked in with state Sens. John Yudichak, D-Plymouth Township, and Lisa Baker, R-Lehman Township, and Rep. Eddie Day Pashinski, D-Wilkes-Barre, to get their viewpoints. Republican Rep. Karen Boback of Harveys Lake did not respond to requests for comment.
Liquor sale reform
&#8226; Pashinski: &#8220;Modernize it,&#8221; he said. &#8220;Don&#8217;t sell it.&#8221;
Pashinski said &#8220;modernizing&#8221; means expanding Sunday sales, moving liquor stores to more convenient locations in or near food stores, allowing mail-order wine sales and allowing Pennsylvania Lottery machines in liquor stores.
Pennsylvania should avoid the tempting one-time revenue that would come from selling off the stores, he said, and bank instead on the $125 million in state revenue he said the stores rake in annually.
&#8226; Baker: The senator said initially she didn&#8217;t think liquor sales reform would affect budget discussions, as finding compromise within the privatization/modernization spectrum by the July 1 deadline seems unlikely.
&#8220;No matter which plan ultimately passes,&#8221; she said, &#8220;the transition will take some time, so there is not much immediate budget relief available.&#8221;
Despite her GOP affiliation, Baker said she is yet to encounter a full-privatization bill she supports.
&#8226; Yudichak: Yudichak said he didn&#8217;t see this issue weighing heavily in budget talks either.
Even so, he said he also opposes efforts to privatize liquor sales in Pennsylvania, and instead prefers the &#8220;modernization&#8221; approach.
Public education
&#8226; Pashinski: The retired school teacher said public education boils down to &#8220;pay now, or pay later.&#8221;
Either pay to educate children, he said, or pay in the long run with an incompetent workforce.
Pashinski said the latest statistics he&#8217;s seen indicate property taxes will rise in 75 percent of school districts in Pennsylvania this year. He said he blames the state, which currently pays only 32 percent of the cost of education, where it has traditionally covered 50 percent.
&#8226; Baker: &#8220;This issue has superseded jobs as the leading public concern at the moment,&#8221; she said.
Education will play a pivotal role, she added, in passing the state budget.
&#8226; Yudichak: &#8220;Investing in education is critical to economic development,&#8221; he said.
The senator blamed decreases in education spending under Corbett for the recent drops in standardized test scores, and he said the state needs to look for new ways to fund public schools.
The 5 percent natural gas severance tax he co-sponsored, he said, would be a solid start.
Medicaid expansion
&#8226; Pashinski:&#8220;The government really should have said yes in 2013,&#8221; he said.
By expanding Medicaid, the representative said the state has everything to gain and nothing to lose.
&#8220;For three years, Pennsylvania would get all of the cost paid for by federal dollars,&#8221; he said.
In that time, he said the governor could continue negotiating medicaid reform, while expansion creates an estimated 35,000-40,000 jobs statewide.
&#8226; Baker: The Dallas senator said she agrees with the governor&#8217;s exploration of &#8220;containing costs within the current Medicaid program. Whether the leverage of Medicaid expansion gets the program flexibility he wants hinges on what the feds decide on the waiver request.&#8221;
&#8226; Yudichak: &#8220;For it,&#8221; he said. 
Expanding the service, he said, would bring healthcare to several hundred thousand Pennsylvanians, and solve nearly half of the state&#8217;s budget gap problems, bringing in $400 million of federal funding.
Yudichak said lawmakers opposing the move place &#8220;ideology over good policy.&#8221;
Natural gas drilling
&#8226; Pashinski: Since 2009, Pashinski said, the lack of a severance tax on natural gas drilling has cost Pennsylvania billions of dollars.
&#8220;We shouldn&#8217;t be in the hole,&#8221; he said, &#8220;we should be in a surplus.&#8221;
He said the state should also look into closing the so-called Delaware Loophole &#8212; which allows companies to route money out of Pennsylvania &#8212; by enacting combined reporting.
&#8226; Baker: She did not say whether she supported a severance tax or not, but said she wants to see at least some money from drilling communities to stay local. 
&#8220;For me, it is essential that we ensure that the communities directly impacted by drilling will continue to receive their fair share of funding,&#8221; she said.
Baker added that she&#8217;s also concerned about the impacts of drilling on landowners.
&#8226; Yudichak: The senator co-sponsored Senate Bill 1333 to levy a 5 percent severance tax on natural gas production.
He said the tax would net $700 million in revenue its first year, with around $300 million allocated toward education, a number he said would grow as the $250 million for economic development and $150 million for environmental stewardship stay the same.
Internet gambling
&#8226; Pashinski: The representative said he has a few problems with the proposed expansion of casino gambling to the world wide web. 
 &#8220;Internet gambling doesn&#8217;t create any jobs,&#8221; Pashinski said. 
He also said it would funnel money away from the brick-and-mortar casinos, which is returned to Pennsylvanians as tax money. If the legislation remains uncomplicated, he said, legalizing video poker machines in taverns and clubs may be a lucrative alternative.
&#8226; Baker: Baker made her position on expanding gambling to the Internet quite clear when she said, &#8220;I do not support online gambling.&#8221;
&#8226; Yudichak: &#8220;I have great concern about the expansion of gaming in Pennsylvania.&#8221; 
Gambling revenue is unreliable, he said, and he thinks the state should seek &#8220;more responsible&#8221; methods of generating income, like Medicaid expansion and his natural gas severance tax.

NEPA lawmakers talk state budget talks