Amendment concerning Allentown improvement zone passes legislature; state budget remains unsigned as deadline approaches

Arguments over charter schools created a logjam as lawmakers worked to approve bills integral to the state budget.

UPDATE: Gov. Tom Corbett signs new state budget minutes before deadline

With a deadline hours away, disagreements over publicly funded, privately run charter schools created a logjam as lawmakers worked to approve bills integral to the state budget and crucial to Gov. Tom Corbett’s agenda.

Budget-related legislation that would stop Allentown from collecting other municipalities’ earned income taxes for its hockey arena was approved by the state Senate and House.

The amendment to the state’s $27.7 million budget was debated late this evening, with a final house vote of 126 to 74. But as of 11 p.m., it still awaited approval from Corbett.

“Every member of the Lehigh Valley delegation, both Democrat and Republican, voted for the corrective language,” said Pennsylvania Rep. Jennifer Mann, a Democrat. “We had to come together to create a fix so this project could move forward.”

The city’s 130-acre Neighborhood Improvement Zone diverts earned income tax generated within the zone to the city’s proposed $220 million hockey arena, which is to be built in time for September 2013 start of the Phantoms’ minor league hockey season. It also diverts tax money for other development in the zone.

Neighboring municipalities that used to receive the taxes and no longer do have argued the zone is illegal. One lawsuit led by Hanover Township came to include 17 municipalities and one state-wide townships advocacy group.

Sen. Pat Browne, a Republican who wrote the original law for the tax zone that passed in 2009, has said the new language would effectively render the lawsuits moot, which officials hope will clear the way for arena construction.

“They’ll have to rework the finance model, because this is a component of the financing, but I believe that the project team will be able to work through this matter to allow for this project to move forward very expeditiously,” Browne said today.

State Rep. Justin Simmons, a Republican, said he believes the courts might rule against the constitutionality of the tax zone if it’s not stricken by the budget legislation.

“The municipalities definitely had a point about the” earned income tax, he said.

Education debate

Regarding the charter schools, the House and Senate, both controlled by Republicans, sent competing education bills to each other after support failed to materialize for changes Corbett sought to expand the creation of charter schools, a key part of his education agenda.

But each of the bills, which were unveiled publicly shortly before being voted on today, faced an uncertain future without a guarantee of support from the other chamber.

Some of the provisions were similar.

Supporters of each bill said they were designed to strengthen state oversight of charter schools, overhaul the way the state distributes special education aid and seek recommendations to address longstanding school board complaints about the amount of taxpayer money charter schools receive.

The big difference was that the Senate bill would create a $50 million tax credit to provide scholarships for students wanting to transfer out of the state’s worst schools.

Earlier, the House sent to Corbett a bill to establish new performance evaluation standards for public school teachers, which the Republican governor supports, despite complaints by Democrats and education advocates that the final version of the bill excluded charter school teachers from the new requirements.

Midnight deadline

While a $27.7 billion general appropriations bill has passed both chambers, key budget-related legislation remained waiting in the wings for a resolution to the fight between the House, Senate and governor’s office over the competing education bills.

One of those bills held Corbett’s biggest legislative priority: Tax breaks beginning in 2017 designed to entice the multibillion-dollar construction of an integrated petrochemical industry in Pennsylvania.

The current budget was to expire at midnight, and legislative leaders have been working long days trying to tie down agreements, write legislation and line up votes before the end of June, when lawmakers traditionally leave Harrisburg for the summer.

Corbett, a Republican, has pledged to sign on-time budgets.

Meanwhile, several other bills that were budget-related or part of Corbett’s education agenda, including ones that make substantial changes to welfare and tax laws, were moving toward his desk despite having been public for less than two days.