In election year, be wary of promises
Many Mirror readers probably reacted with an emphatic “Yes!” upon reading last Sunday’s article about possible 2018 efforts in Harrisburg aimed at state tax reductions and other commonwealth tax reforms.
Those readers probably concluded “What’s not to like?” about this or any other proposal that would leave more money in their pockets.
It was a logical reaction and not necessarily wrong — at least not under the right fiscal conditions. Trouble is, Pennsylvania isn’t living amid fiscal conditions worthy of enacting tax reductions.
The Keystone State remains in fiscal trouble, despite lawmakers of both parties now starting to sugarcoat the troubling situation as they look ahead to this year’s elections.
This is a gubernatorial election year, and all seats of the House of Representatives and some Senate seats will be on the ballots.
So, don’t bet on the reliability of any statements by Gov. Tom Wolf or any lawmaker that this state’s nagging structural deficits have basically been resolved.
It’s ludicrous to think that, having had to borrow at least $1.5 billion to help shore up a 2017-18 budget shortfall of approximately $2.2 billion, the state made gigantic headway at erasing the fiscal challenges that have dogged Pennsylvania for about a decade.
Any notion of such progress is merely an effort to deceive, as long as the issue of ensuring enough recurring revenue each year remains unfinished business — and there’s no sign that resolving that issue is anywhere in sight.
In fact, judging from early comments and the foolish optimism being expressed, Harrisburg could be on a “freight train” destined to thrust this state into a more difficult financial morass than what greeted lawmakers and the governor at the start of 2017.
Instead of attacking realistically and effectively the recurring-revenue shortage, lawmakers seem poised at burying the state in a deeper financial hole from which it will be much more difficult to escape.
Last Sunday’s report by online news and information service Capitolwire, under the headline “State seeking tax reform after federal effort passes,” said pieces are being assembled in Harrisburg with the goal of reducing both the state personal income tax and the Corporate Net Income Tax, effective during the 2019-20 fiscal year.
Some Pennsylvania lawmakers are treating the federal tax reform that Congress approved last month as a magic wand capable of erasing the Keystone State’s big-time money shortage.
But while Congress can deal with the $1 trillion to $1.5 trillion that the federal tax cuts are expected to add to the national debt — Congress no doubt will continue increasing the national debt limit — Pennsylvania’s constitutional mandate to pass a balanced budget doesn’t offer such a dubious luxury.
What’s destined to occur, if state tax reductions are forthcoming, is increased difficulty in making ends meet — and more prolonged and nasty budget fights.
Pennsylvania must get its fiscal house in order before giving away money it, and the programs and services that the state helps fund, desperately needs.
Under the right fiscal conditions, tax loads on individuals and companies should be lightened — indeed. However, irresponsible tax actions based on winning votes instead of fiscal common sense will pour the foundation for future money crises of horrible scope and, eventually, serious taxpayer pain.
For Pennsylvania taxpayers, then, the best advice is to avoid falling victim to the temptation to shout “Yes!” without proof the reaction is justified.