Pennsylvania lawmakers look to end budget stalemate, sealed with concession by Democrats on climate

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HARRISBURG, Pa. (AP) — Billions of dollars for Pennsylvania’s public schools and social services could soon start flowing after months of delay, as lawmakers on Wednesday took up a roughly $50 billion spending plan to break the state’s budget impasse.

Democratic Gov. Josh Shapiro was expected to sign key budget bills by the end of the day.

A concession to help seal a deal meant Democrats agreeing to Republican demands to undo a regulation aimed at making Pennsylvania the only major fossil fuel-producing state to force power plant owners to pay for their planet-warming greenhouse gas emissions.

Democrats won't get the amount of money that Shapiro originally sought in his initial budget proposal, but the deal — after weeks of closed-door negotiations — is expected to deliver substantial new sums to public schools, as Democrats had sought, and an earned income tax credit for lower earners.

It will also bring relief that the stalemate is over.

“The win is that we’re going to, hopefully before the end of the day, have a funding plan for the commonwealth and that’s a win for everybody who’s been waiting on state resources," House Appropriations Committee Chairman Jordan Harris, D-Philadelphia, told reporters in a Capitol hallway Wednesday morning.

The advancing votes in the politically divided Legislature arrive weeks after counties, school districts and social service agencies warned of mounting layoffs, borrowing costs and growing damage to the state’s safety net.

School districts, rape crisis agencies and county-run social services have gone without state aid since July 1, when the state lost some of its spending authority without a signed state budget in force.

The agreement to back off the carbon dioxide cap-and-trade regulation on power plants comes six years after then-Gov. Tom Wolf made joining the Regional Greenhouse Gas Initiative the centerpiece of his plan to fight climate change.

Wolf's regulatory plan went around resistant Republican lawmakers in a bid to make Pennsylvania — the nation's second-largest natural gas producer — the only major fossil fuel-producing state to undertake a carbon cap-and-trade program.

It has yet to take effect while the state's highest court considers a legal challenge that questions whether the carbon-pricing plan amounts to a tax, and is thus unconstitutional without legislative approval.

Backers of the regulation included environmental advocates as well as solar, wind and nuclear power producers who called it the biggest step ever taken in Pennsylvania to fight climate change.

It was opposed by Republicans, fossil fuel interests and the labor unions that work on pipelines, refineries and power plants who warned that the cost was sending energy companies to other states to build new gas-fired power plants.

Shapiro had also expressed misgivings about it, and an alternative plan that he proposed has yet to receive traction in the Legislature.

Under the $50.1 billion budget deal, new authorized spending would rise by about $2.4 billion, or 5%, including some cash going onto last year's books.

Almost all of the overall spending increase would go toward Medicaid and public schools.

Billions in surplus cash will be required for the plan to balance, the second straight year that Pennsylvania is running a multibillion-dollar budget deficit.

The agreement also includes the state’s first refundable earned income tax credit, which reduces or wipes out the state income tax for people who make less than a certain amount of money, depending on how many children they have. It’s something most other states have on their books.

Pennsylvania’s plan is projected to cost roughly $200 million a year. Had it been in effect this year, the average eligible family would have gotten a $650 break, lawmakers say.

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Follow Marc Levy at http://twitter.com/timelywriter.