Fingers crossed on good signs for state budget
Pennsylvania taxpayers won’t have to look under their Christmas trees on Dec. 25 to find their gift from the state Legislature.
It’s already been delivered, not by Santa Claus, but by way of an assurance from Republican leaders that they don’t intend to seek any tax increases as part of the 2019-20 state budget.
Despite that assurance, it never can be guaranteed that a couple of unwanted, thorny “Bah Humbugs” could creep into budget negotiations as the new spending plan is finalized around mid-year. The new state fiscal year begins July 1.
Still, with the revenue growth that the state has experienced so far during the current spending calendar, coupled with the commonwealth’s stronger economic performance in general, GOP leaders said any tax-increase proposal would be a tough sell with rank-and-file Republicans as well as with some Democrats.
Most state taxpayers no doubt are willing to raise a holiday toast to that.
Therefore, all that’s been said thus far suggests another “dead on arrival” if Gov. Tom Wolf decides to propose once again a severance tax on the Marcellus Shale gas-drilling industry when he presents his fifth budget address on Feb. 5. He has sought the tax unsuccessfully in each of the budget plans that he’s introduced leading up to 2018-19.
But Wolf’s top budget official, Budget Secretary Randy Albright, spoke optimistically in his latest mid-year budget briefing also, noting that “we are very confident that not only will we end the year with a balanced budget, but we will end the year — we will leave — with a modest surplus.”
Unfortunately, there’s an ongoing Scrooge-like issue lurking that lawmakers and the governor will have to address during their upcoming-year budget talks.
It’s a projection by the state Independent Fiscal Office, in its latest five-year economic and budget outlook, that next year’s state budget could have a gap of up to $1.7 billion between available revenues and anticipated spending.
According to the IFO, the potential imbalance, which is referred to as a structural deficit, is rooted in the use of more than $1 billion in one-time funding sources in the current budget plus anticipated increases in spending on health and human services programs.
How to deal with that shortfall could be the basis for some of the friction that might evolve as the legislative and executive branches work to hammer out the final version of a spending plan upon which both parties, both legislative houses and the governor can embrace.
As for the monthly revenue surpluses that have been showing up this fiscal year, Albright said an undetermined amount of that money would need to go for supplemental appropriations to meet higher costs for human services and long-term-care programs, as well as for higher overtime costs in the Department of Corrections during the current fiscal year necessitated in part by lockdowns at state correctional institutions last summer to address drug-smuggling problems.
Despite the holiday “gift” from the Legislature, the state’s new budget exercise won’t be — and never should reach the point of being — a source of full harmony. Disagreements on how to proceed are the fodder for piecing together the best budget package possible.
The state’s taxpayers have been given what appears to be a great gift, but there still could be some strings — not ribbon and bows — attached.