Pennsylvania budget issue inescapable

Each year in Pennsylvania, as May gives way to June, news reports are abundant about how Keystone State lawmakers are dealing with the challenge of assembling a spending plan for the upcoming fiscal year that begins July 1.

As the past has demonstrated, that process sometimes also includes opting for certain “creative” options and projections that have dubious prospects for achieving their desired results — but they end up in the ratified budget document nonetheless.

That is budget time in Pennsylvania — traditional budget time. The state’s taxpayers are accustomed to it and do not really give it much serious thought, as long as no plan for a tax increase is on the budget-bargaining table.

This year, the coronavirus pandemic has installed a fiscal albatross, not only for Pennsylvania state government but also for all other entities that exist by way of a July-to-June budget calendar, such as the commonwealth’s 500 public school districts. From a fiscal perspective, there is no clear indication of the full scope of the financial devastation that COVID-19 seems likely to inflict.

Rather than haggling over too many minute budget details, looking forward, state lawmakers and Gov. Tom Wolf, to their credit, settled this month on the idea of passing a stopgap budget plan.

That budget strategy aims to provide a full year of funding for basic education, state-supported universities and debt service. Meanwhile, many other budget categories will be funded only through Nov. 30, the last day of the current two-year legislative session.

The “new” legislature that is seated based on the results of the Nov. 3 general election will be tasked with piecing together spending for the final seven months of 2020-21 — a responsibility that will not be a cakewalk, if predictions about the continuing pandemic and its financial impacts prove to be accurate.

Financial fears on all government fronts are not centered just on 2020 and 2021. David Harrison’s “Outlook” column in Tuesday’s Wall Street Journal began with the dire prediction that “the hit to U.S. state and local finances from the coronavirus pandemic could be a drag on the nation’s economic recovery for years to come.”

Harrison repeated the Moody’s Analytics projection that states and cities across the country will need to make $500 billion in cuts over the next two years due to the coronavirus’ economic effects.

Wolf has predicted that this state might in the end have to deal with a budget deficit of as much as $5 billion for 2020-21.

As Tuesday’s Mirror reported, the Pennsylvania Association of School Business Officials envisions that the state’s school districts could lose more than $1 billion in local revenue due to COVID-19.

Altoona Area School District Superintendent Charles Prijatelj fears a loss of $1.2 million in earned income tax revenue alone, and all other area districts are fearful of some degree of loss likewise.

On the national front, Federal Reserve Chairman Jerome Powell isn’t upbeat about the financial-healing time that will be required, and that message is troubling.

The challenges ahead will require the best of what America is all about.

How well the nation is prepared for those challenges remains unclear now but will become apparent sooner rather than later.


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