State budget still lacking responsibility
The most daunting question hanging over Pennsylvania’s 2017-18 state budget deliberations is whether, at this time next year, the commonwealth’s fiscal shortfall will be close to or exceeding $4 billion.
The shortfall estimate was $3 billion in early February when Gov. Tom Wolf announced his $32.3 billion budget proposal for the coming fiscal year, which begins July 1. At the start of deliberations for the commonwealth’s 2016-17 spending plan in early 2016, the deficit figure was being reported as approximately $2 billion.
The state’s growing fiscal morass must not be allowed to remain unchecked, but that will depend on what decisions are finalized for the new budget year.
The situation seemed cautiously optimistic after Wolf delivered his budget address. Rather than building his budget plan predominantly on a foundation of new and higher taxes, his plan was to exact $2 billion in government-efficiency savings and only $1 billion worth of new levies.
The new-tax proposals revolved around applying the state’s Sales and Use Tax to several currently exempted products and services; proposing again, as he has every year since becoming governor, a controversial severance tax on natural gas drilling; and assessing local municipalities without police departments for state police protection.
He also projected that expanded gambling would bring in $150 million during 2017-18; $100 million of anticipated incoming revenue was included in this year’s budget, but that gambling expansion and money never materialized.
The Legislature finally has gotten around to the gambling issue again, but lawmakers are by no means unanimous regarding all of what’s being proposed.
Meanwhile, that $100 million lost due to legislative inaction since July 1, 2016, is lost forever.
Beyond that, even if gambling options are expanded, the amount of incoming revenue is by no means assured.
Wolf has said in recent days that the Senate’s gambling-expansion plan would fall short of the revenue goal that he seeks.
Then there’s the unease surrounding the government-efficiency proposals, primarily because of their impact on local-level services. In this area, county commissioners of Blair and Bedford counties have expressed concerns about possible funding cuts; the Bedford County commissioners anticipate a loss of $100,000 for programs and grants.
Wolf’s proposal to fill budget holes by reducing by $50 million, payments to school districts for busing costs is meeting growing criticism. He’s using the argument that districts could live with the cuts because of greater fuel efficiencies and lower gasoline prices, but there’s no guarantee that gasoline prices won’t skyrocket again.
State decisions negatively affecting revenues to school districts, counties and municipalities risk necessitating higher local-level taxes — what people who oppose any state income tax increase usually fail to acknowledge.
And, that failure-to-acknowledge extends to the costs associated with expanded gambling — among them the possible financial damage to individuals and families.
Adding to the state’s financial pressures are the Legislature’s inability to make significant headway on pension reform, and the fact that incoming tax revenues continue to be anemic.
Harrisburg’s annual failures to come to grips with the state’s fiscal problems indicate a state government attitude of “Oh well, maybe next year” — while the money shortfall continues to grow.
A $3 billion shortfall and counting, while state government continues harboring the foolish notion that it’s serving state residents’ best interests by passing budgets that are more deceptive and unrealistic than responsible.