House approves version of state spending limits

Thursday, November 03, 2005

By Martha Raffaele, The Associated Press

HARRISBURG -- Lawmakers would have to limit state spending increases to the rate of inflation unless voters give them permission to exceed such a cap under legislation approved early yesterday by the state House of Representatives.

The legislation, which goes to the Senate, passed 110-87 after four hours of debate that lasted past midnight.

Republicans, who control the General Assembly, contend the legislation will curb excessive spending and lower taxes. Democrats argue that spending caps would force the state to drastically cut services such as health care for the elderly and special education.

"If you want to say we're somehow being disingenuous by doing this, I'm willing to admit we have not done as good a job as we should have" limiting previous budget increases, said House Majority Leader Sam Smith, R-Jefferson. "I'm guilty and I'll take the blame ... but don't criticize us for then trying to get controls on spending."

The bill would tie annual budget increases to the prior three-year average percentage increase in the cost of living. Higher increases would have to be presented to voters in a referendum.

House Minority Leader H. William DeWeese, D-Waynesburg, unsuccessfully sought to expand a list of exceptions that would automatically allow the Legislature to exceed the spending cap. Exceptions in the bill include expenses related to federal mandates, pension obligations and any emergency spending that is approved by three-fifths of each house of the General Assembly.

The additional exceptions Mr. DeWeese proposed included funding for the Pennsylvania National Guard, special education and state troopers.

The Senate approved two similar spending-cap bills on Oct. 26, sending them to the House. The Senate's legislation would allow lawmakers to exceed the spending cap or to appropriate money from an emergency reserve fund with a two-thirds vote.

The Senate bills would also restrict spending increases to the lesser of the prior three-year average percentage increases in personal income or inflation plus population.

Gov. Ed Rendell's press secretary, Kate Philips, has declined to say whether Mr. Rendell would veto such a bill. In the past, Mr. Rendell has said that the state's revenue collections impose a natural ceiling on spending because the state constitution requires a balanced budget.