PA Budget and Policy Center on the Mid-Year Budget Briefing

Published: 12/18/2016 11:00 AM
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Pennsylvania Budget and Policy Center Director Marc Stier used the operative word: “Worrisome.”

He was reacting to state budget secretary Randy Albright’s recent mid-year budget briefing, in which he predicted a deficit of $600 million. Worrisome indeed.

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You’d think Pennsylvanians would be used to this. And perhaps we would be, but the number grows larger each year while the prospects for new revenue grow more bleak.

As Albright explained, part of the deficit is the result of lower tax revenues than were projected when the budget was enacted in July. Another part is higher human service caseloads, which will require a “supplemental appropriation.”

The projected deficit might increase again, he said, if the General Assembly does not enact legislation to bring in $100 million in internet gaming revenues and if a second Philadelphia casino license is not sold for $50 million. With that, the 2017-18 deficit is projected at $1.7 billion ($1,700,000,000).

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The good news, if it can be described as such, is that the deficit is not growing because of increased spending. That’s been kept in check going back to the Corbett administration.

The policy center, which is a non-partisan group, blames reductions in corporate taxes that were not made up by other revenues.

“And it has been made worse by the willingness of the General Assembly to plug holes in the budget this year and in previous years by relying on one-time revenues from the sale of licenses, from borrowing from special funds (which must be paid back), and from shifting costs from current to future years.”

Meanwhile, any new revenue, as described above, would come through extracting even more money from Pennsylvanians through gambling.

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Patch-work solutions aren’t going to turn Pennsylvania’s bottom line from red to black. It’s time for much more fundamental changes, one key one suggested by PCPB.

“Ultimately, the General Assembly is going to have to fix Pennsylvania’s upside-down tax system, which taxes those with lower and middle incomes at much higher rates than those with higher incomes, in order to provide the revenues the state requires to meet the needs of all Pennsylvanians.”

There’s no sense waiting any longer to get that, and other reforms, under way. A combined $3 billion deficit over the next two fiscal years provides ample warning that drastic measures are imperative.

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