Corbett rolling his dice
Gov. Tom Corbett’s proposed 2014-15 budget is more of a gamble than a responsible fiscal package.
Between now and June 30, the end of the current budget year, the General Assembly will have the major task of either justifying the Corbett plan’s questionable provisions or make changes that will keep the commonwealth’s money problems from worsening.
As late as December, state Budget Secretary Charles Zogby projected a $1.4 billion deficit going into 2014-15 budget preparations. Last month, Pennsylvania’s Independent Fiscal Office estimated that the commonwealth will end the current fiscal year $150 million worse off than had been predicted previously.
Meanwhile, the IPO issued a warning about a long-term structural deficit that could leave the state with a $2 billion-plus shortfall by 2018-19.
Despite all those dire numbers, Corbett, in his budget address earlier this month, put election-year politics ahead of the strong fiscal discipline that he demonstrated during his first three years as the state’s chief executive.
And, while the governor might be able to execute a successful money charade leading up to the November election, by claiming that the fiscal picture is improving, state taxpayers shouldn’t be surprised if the numbers reveal something less optimistic after the ballots are counted.
With the state perhaps $1.5 billion in the red, looking ahead to the 2014-15 fiscal year that begins July 1, Corbett wants a 3.3 percent increase in spending over what’s budgeted for 2013-14. Meanwhile, rather than delaying the continuing phase-out of the capital stock and franchise tax, to help support that increase, the governor has chosen to roll the dice by allowing the phase-out to continue.
He’s assuming increased income from the personal income tax will make up the loss, even though the income tax is falling short of what was projected for this fiscal year.
There can be no certainty that his upbeat assumption will pan out.
It was no surprise to hear Corbett call for an increase in education spending; governors seeking re-election regularly do that. However, a proposed $387 million increase amid so much red ink justifies fears about the ultimate consequences of such a move.
Democrats’ objections to Corbett’s budget proposal are politically motivated at least in part, but what they’re saying should not be wholly disregarded without a close look. Some of Corbett’s budget tactics this year, including his plan to defer pension costs, don’t demonstrate sound thinking.
Likewise, his refusal to tax the Marcellus Shale gas industry comparable to what other states are doing is depriving the state of badly needed revenue for important services.
In an article in Sunday’s Mirror, a Duquesne University economics professor was quoted as saying that “all sorts of weird things happen in election years. The game becomes very much one of appearances rather than reality.”
But the 3.3 percent spending increase being sought by Corbett is reality. Fortunately, lawmakers have the power to undo it; indeed, they have the responsibility to do so.
The state isn’t going to make ends meet on the proceeds from newly legalized small games of chance, either.
In his 2014-15 budget proposal, Corbett is placing too big of a bet at a time when the fiscal odds are stacked so much against him.