Budget weighs current debt vs. future benefits
The good news in the immediate aftermath of Gov. Tom Wolf having delivered his 2019-20 Pennsylvania state budget proposal on Tuesday was that lawmakers on both sides of the political aisle spoke confidently about prospects for completing a spending package by the June 30 deadline.
Legislative scrutiny of the governor’s proposed $34.1 billion spending plan begins tomorrow, when the House and Senate Appropriations Committees launch several weeks of hearings, with cabinet members and agency leaders appearing before them to discuss their efforts and needs.
The bad news, from Democrat Wolf’s perspective, is that some important aspects of what he has proposed are destined to get a significant “makeover” by the Republican-controlled Legislature, while others, including Wolf’s request for a severance tax on the Marcellus Shale gas-drilling industry, already are “dead in the water.”
Still, a hopeful sign for this latest annual budget-preparation exercise is that top GOP and Democratic lawmakers indicated that they concurred with the governor’s priorities for the upcoming fiscal year’s spending: provide new educational opportunities, beef up workforce development and implement reforms to the criminal justice system.
Senate Majority Leader Jake Corman, R-Centre, said, “I think there is a lot there we can embrace and get behind at least generically.”
House Majority Leader Brian Cutler, R-Lancaster, said, “Governor Wolf’s budget sets forth a series of ideas that I believe House Republicans can find agreement on.”
However, at the same time there were cautionary viewpoints such as those from Senate Appropriations Committee Chairman Pat Browne, R-Lehigh, and House Appropriations Committee Chairman Stan Saylor, R-York, who criticized the Wolf budget plan for wanting to spend what they characterized as “too much money.”
Wolf is seeking authorization for $1.9 billion in new spending — nearly 6 percent of the 2018-19 enacted budget of $32.7 billion.
The proposal comes on the heels of a new report indicating that state revenue collections for January were $113.7 million short of official estimates for the month.
Still, according to the news and information service Capitolwire, Pennsylvania general fund revenue collections through January remained $290 million ahead of the official estimate upon which the Fiscal Year 2018-19 state budget is based.
There’s again no stomach in the Legislature for a state income tax increase, and there’s also virtually no chance for any changes regarding the current 6 percent sales tax.
The governor wants to increase the state’s minimum wage to $12 an hour from $7.25, but the chances for that happening are probably zero, although any increase in the minimum wage would mean additional revenue for the state’s coffers.
However, that benefit could be negated if companies, in response, were to cut back on new jobs available.
One budget aspect that no doubt should — and no doubt will — receive much scrutiny and debate is the budget proposal’s acknowledgment that debt would grow by $67 million (6 percent) to $1.2 billion.
The prospect of increasing debt must be weighed against some of the long-term benefits that might be derived from exercising all or some portion of that option. Some might be the benefits from increasing aid for general public school operations and instruction by $200 million; special education, by $50 million; and early childhood education, by $50 million, all of which Wolf is proposing.
Every budget is built to some degree on compromise. Regarding this new budget exercise, fewer obstacles seem to be standing in the way of positive give-and-take.