Tough decisions await lawmakers on state budget
As has been evident for months, Pennsylvania’s state budget-preparation exercise for the 2018-19 fiscal year has been less acrimonious than the commonwealth’s three previous annual budget-making processes.
Regarding those previous years, most state residents can recall the $2 billion-plus fiscal shortfalls, missed deadlines and the downgrades to the state’s credit rating because of state officials’ inability to come to grips with anemic incoming revenue.
The prospect for more budget harmony this year, also in part due to this being a gubernatorial and legislative election year, doesn’t mean that no significant concerns exist.
In fact, the last weeks before the June 30 2018-19 budget-preparation deadline will require some important decisions regarding sizable amounts of money, as noted by the online news and information service Capitolwire in recent days.
First, lawmakers could have to find as much as $500 million to pay for the proposed new budget if the state remains on its current fiscal course this month and next month and lawmakers agree to spend as much as Gov. Tom Wolf proposed in his February budget address.
Meanwhile, among other unresolved issues are whether the state should allocate millions of dollars to help schools improve security and help counties upgrade their voting systems with machines that have a verifiable paper trail.
The need for school security upgrades wasn’t an issue when Wolf presented his budget blueprint on Feb. 7; the Feb. 14 Parkland School shooting in Florida pushed the issue to the forefront.
Meanwhile, it wasn’t until last month that Wolf put election security on the front burner — fallout from the alleged Russian meddling in the 2016 presidential election.
Additionally, the state could be facing a
$200 million shortfall in projected revenue due to federal litigation preventing a $200 million transfer to the General Fund from the Pennsylvania Professional Liability Joint Underwriting Association.
That wouldn’t be an issue if the commonwealth had enough tax revenue coming in to negate the need for the transfer.
While the state’s fiscal situation is brighter, it’s still “partly cloudy.”
Although Harrisburg endured much criticism during the past three years over how long it took to prepare the annual budgets, state leaders shouldn’t be accorded that reaction this year for now having made the decision to wait until virtually the last minute before tying together 2018-19 budget loose ends.
House Majority Leader David Reed, R-Indiana, provided reasonable justification for waiting until the end of June, saying that the Legislature doesn’t want to be blindsided by an unanticipated late revenue shortfall.
Uncertainties revolve around one Wolf proposal for acquiring some of the money needed to balance 2018-19 income and spending. According to the Hospital and Healthsystem Association of Pennsylvania, the governor wants to increase by $130 million the assessment on hospitals under the Quality Care Assessment law.
As it currently exists, the law contains a
$220 million assessment, but the law expires at the end of June, requiring reauthorization.
Wolf wants the law reauthorized with a
$350 million assessment, which is money that ultimately comes from patients and their insurers.
But even that proposed revenue increase won’t alleviate the need for some other tough decisions by lawmakers and the governor over the next seven weeks. One isn’t likely to be imposing a severance tax on Marcellus Shale gas drilling.
Budget preparation is less acrimonious this year, but it’s not a proverbial walk in the park.