State still in fiscal fairy tale

Pennsylvania faces the difficult task of addressing what Gov. Tom Wolf and the Legislature seem to agree is a $3 billion deficit — a figure $1 billion higher than what state government acknowledged during 2016-17 budget preparation last year.

Because no one in Harrisburg has disputed that ominous observation publicly, state residents must assume that the commonwealth’s fiscal situation is at least as dire as that terrible number indicates.

But while the Keystone State remains on a collision course with the prospect of a financial crisis, don’t count on the General Assembly to feel the financial pain that many state-funded entities are feeling.

According to a report by the online news and information service Capitolwire, which was printed in the March 23 Mirror, a new audit has revealed that the Legislature’s own money surplus grew during the 2015-16 fiscal year by $18 million, to $118.4 million — by no means a paltry sum.

Keystone State residents should be unanimous in arguing that that’s much more extra money than the Legislature needs to have on hand — especially during this difficult fiscal time.

Numerous state-funded entities are being forced into counterproductive cost-cutting while many of the people responsible for the state’s fiscal doldrums insulate themselves from pressure to make realistic decisions to confront the money shortage.

The word “insulate” is apropos because having a big surplus on hand is the crutch the Legislature says it uses to maintain a balance of power between the legislative and executive branches of the state government.

What that means is that lawmakers have the power to resist compromises with the governor, even when the June 30 budget deadline isn’t met.

That’s not to cast all or most of the blame for Pennsylvania’s budget failures on the General Assembly; during the past two years, Wolf has earned a big share of the blame as well.

The point that needs to be emphasized is that Pennsylvania has been living a fiscal fairy tale for years, even before Wolf was elected as the state’s chief executive.

Many times during those years the Legislature acted like a person in financial trouble who is “certain” that he or she will be winning the Powerball jackpot sometime soon.

That person is more likely to get out of the financial hole by making painful spending and money-management decisions immediately, rather than trying to beat lottery odds.

Similarly, the Legislature and administration can be more likely to achieve deficit-reduction success by enacting corrective measures before the situation offers no other choices than terribly dire ones.

Rather than worrying about having an unacceptably large financial cushion for doing battle with the governor, the General Assembly ought to simply bear down in a spirit of compromise and open-mindedness to ensure that there won’t be another budget crisis, especially one like two years ago.

The governor should likewise dedicate himself to a new level of compromise and open-mindedness.

The Legislature should return half of its surplus to the state’s General Fund, targeted toward deficit reduction, despite legislative Democrats, as well as Republicans, supporting keeping the money.

Eric Epstein, of the good government advocacy group Rock the Capital, labels the surplus a slush fund that taxpayers shouldn’t tolerate.

He’s right: The Legislature’s grip on the money is wrong.