If this were a year ago, Gov. Tom Wolf would have told state legislators to take this year's budget along with the revenue package to fund it and shove it, but that was then, and this is now. The properly chastened Wolf, who was shown during last year's budget battles a thing or two about how politics works in the commonwealth by Republican lawmakers, wasn't about to go there again this year, so he unceremoniously caved in and signed a bipartisan $1.3 billion revenue package that depends on a gaggle of "sin" taxes, some borrowing - robbing Peter to pay Paul - and smoke, mirrors and gadgetry.

Wolf had allowed a $31 billion spending bill to take effect at midnight on Monday for the 2016-17 fiscal year, which started July 1. He did not sign the bill but allowed it to become law after 10 days of inaction.Trying to put a good face on a bad situation, Wolf said in a released statement: "This package is an important step forward and includes sustainable, recurring revenue that makes significant progress toward reducing our structural deficit."Conservative Republicans gagged on the election year potpourri of proposed tax increases. One of their leaders is really angry. Daryl Metcalfe, R-Butler, said the House leadership had Wolf boxed into a corner to agree on smaller tax increases but let him off the hook.The $1.3 billion was a far cry from the $2.7 billion that Wolf called for in his budget address early this year, a number that Wolf said was necessary to fully fund state education programs and to address the growing budget deficit.Wolf wanted to increase the state income tax from 3.04 to 3.40 percent, but the leadership of the Republican-controlled General Assembly announced that this idea was dead on arrival. They drew their line in the sand that there would be no broad-based tax increase - sales tax or income tax - nor would there be a tax on the extractions from Marcellus Shale gas and oil drillers.The revenue shortfall was further exacerbated by underperforming tax revenues during the fiscal year which just ended on June 30. This out-of-kilter budget could have led to a further downgrade of Pennsylvania's sinking credit rating. It also could have prompted a court challenge since, constitutionally, Pennsylvania, unlike the federal government, must have a balanced budget.Many Democrats conceded that they had no alternative except to hold their collective noses and go along with the spending plan. The House favored the spending bill 116-75 (12 legislators did not vote), while the Senate approved 28-22, with all of them casting votes. They know that the state will be in the same deficit-unfriendly territory when budget time rolls around next year.The budget funding relies heavily on a $1-per-pack cigarette tax hike. The most controversial part of the tax package - expanding gambling - has not yet passed the General Assembly, so leaders will have to coax and cajole balking representatives and senators to go along with the plan, even though casino owners are threatening a mutiny on new expansion plans at their properties.Assuming the legislation is passed when the General Assembly returns to business in the fall, as predicted by State Sen. Pat Browne, R-Lehigh, it would make Pennsylvania the fourth state to legalize casino-style gambling on the Internet. Most of the money would come from one-time license fees. That bill, however, has stalled because House and Senate members disagree on its reach. If legislators bow to casino-owners and reject the proposal, then additional revenue would be needed to plug an already shaky budget.The revenue for the 2016-17 budget will be coming from:• A $1-per-pack increase on cigarettes and new taxes on e-cigarettes, smokeless tobacco (once known as snuff) and roll-your-own tobacco.• An extension of the 6 percent sales tax including digital downloads, video, video-streaming, books, games, music apps and satellite radio, such as SiriusXM, effective Aug. 1.• An increase in the state bank shares tax• An extension of the state's 3.07 percent income tax to include state lottery winnings.• An increase by 2 percent on the casinos' gross revenue from table games.Lawmakers also are hoping to raise $150 million from expanded wine sales in the private sector, a provision authorized last month.Observers say that even though this package is a hodgepodge of increases, it still represents the most significant tax rise in an election year in a generation. All 203 representatives and 50 of the 100 senators are up for election in November. Typically, legislators are reluctant to raise any taxes in an election year for fear of alienating voters. Many legislators are in politically "safe" districts, thanks to the Republican-inspired reapportionment plan that went into effect after the 2010 census, but in this anything-but-typical election year, all bets are off.What we have in this so-called compromise budget is another example of how legislators chose to cobble together a Frankenstein of gadgetry rather than trying to solve the state's long-term financial mess. And in a stunning 180, Wolf went along with it.By Bruce Frassinelli |

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