Budget harmony elusive
Gov. Tom Wolf’s pursuit of a different strategy to extract Pennsylvania from its fiscal morass might in the end get more support than his two previous state budget proposals.
However, the $32.3 billion 2017-18 budget plan Democrat Wolf unveiled on Tuesday still contains much that the Republican-controlled Legislature will reject.
The bottom line is that budget harmony could remain elusive until well after the June 30 budget-preparation deadline.
While there’s wiggle-room for compromise, there’s also plenty of room for stalemate.
That’s not to imply that much of what the governor seeks doesn’t make sense from the standpoint of the state living within its means.
What makes the situation uncertain is that some of Wolf’s important proposals this time were rejected by the General Assembly during the last two budget cycles and aren’t likely to evoke a change of heart for 2017-18.
The one standing out most is Wolf’s desire to impose a severance tax on natural gas drillers. But close behind are revenue-raising measures directed at the business community — business-related revenue-raising measures that, if they fail, could short-circuit Wolf’s attempt to obtain $1 billion to help close a projected $3 billion deficit.
Wolf has proposed cuts, efficiencies and consolidations to address the other $2 billion of red ink.
Regarding the government spending reductions, lawmakers have touted such an approach in the past, but how they’ll react to the specifics of what’s now on the budget table is uncertain.
Budget hearings begin next week.
Although House Majority Leader Dave Reed, R-Indiana, acknowledged that what Wolf has presented provides “a more realistic starting point” than Wolf’s past years’ proposals for income and broad sales tax increases, Senate Majority Leader Jake Corman, R-Centre, criticized many of Wolf’s current ideas as mere “window dressing” for avoiding the real issues dogging the state.
“This budget proposal does nothing to address the pension crisis,” Corman said. “It does little to address long-term spending. It appears to do little to address the growth in Medicaid spending.”
He also objected to the Wolf proposal to lease the Pennsylvania Farm Show Complex in expectation of a $200 million up-front payment.
Wolf’s desire to increase the state’s minimum wage to $12 an hour from $7.25 as a means for pumping up incoming tax revenue is unlikely to receive legislative support. The same fate is likely for the governor’s plan to apply the state’s Sales and Use Tax to certain currently exempted products and services.
Hovering above all that Wolf proposed is the serious question of whether, once a final budget package has been assembled, Pennsylvania will be more financially well-off.
Perhaps House Minority Leader Frank Dermody, D-Allegheny, summed up the budget-preparation situation best, saying, “There’s no easy way out of this … so to suggest we can do this without some pain is not realistic.”
That doesn’t necessarily mean a tax increase, but somebody always is hurt when cuts are implemented and efficiencies are put in place.
In fact, pain is what’s at the heart of Wolf’s spending plan.
For the Legislature, the task at hand is to keep the pain level as bearable as possible, while accepting the reality that this state cannot continue to allow its fiscal fortunes to remain so precarious.
A fiscal morass is every state resident’s problem.