By Steven Hoffman
The proposed revenues and expenditures in Pennsylvania’s state budget for the 2017-2018 fiscal year remain unbalanced—and so is the process that state lawmakers use to develop a spending plan each year.
Gov. Tom Wolf announced last week that, for the second year in a row, he intended to allow a budget crafted by the State Legislature to become law without his signature after he and the lawmakers failed to reach an agreement. The result will be a spending plan that is unbalanced and does not address the state’s ongoing budgetary issues.
Three years ago, Gov. Wolf and the State Legislature failed to agree on a spending plan, creating a nine-month budget impasse that hurt school districts and municipalities and threatened social service organizations that rely, at least in part, on funding from the state.
It’s easy to understand why state lawmakers have a difficult time passing a balanced and sensible budget. The state has a budget deficit that exceeds $2 billion. In order to address the budget deficit, spending would have to be cut or the revenues would have to be increased.
It’s not easy to convince Democrats to cut spending, which would likely mean less money for public schools and social services. And increasing revenues enough to balance the spending would likely mean tax increases, and Republican lawmakers are adamantly opposed to that.
Complicating matters is the state’s diversity. It’s hard to get Republicans and Democrats to agree on spending cuts or tax increases, but in Pennsylvania the differences often boil down to what is agreeable to big city lawmakers and small town lawmakers. What is good for residents in Philadelphia or Pittsburgh isn’t necessarily good for residents in the more rural areas of the state.
So what you get is an unbalanced budget and a perpetually unbalanced budgeting process.
It’s not just broad taxes that state lawmakers can’t agree on. Pennsylvania lawmakers can’t agree on a natural gas extraction tax even though every other state with energy drilling uses this tax to generate revenues to provide the needed services to citizens.
Even when Republicans controlled the governor’s office, the state senate, and the state house, it was difficult for lawmakers to come up with compromises that they all agreed on and that addressed the state’s long-term needs.
Pennsylvania’s economy simply isn’t growing fast enough to generate the revenues necessary to balance the budget without tax increases. The state ranks in the bottom half nationally on a variety of economic performance categories.
The state doesn’t have the revenues necessary right now to invest in economic development or job growth programs, to adequately invest in infrastructure improvements, or to support programs that improve the lives of residents. The issue of property taxes, and the heavy reliance on local taxes to fund public education, has long been a top concern for Pa. residents, as has the inequality in funding for public schools. The wealthiest school districts have never had more to spend per pupil than they do now, but other school districts don't receive a fair share of funding.
The way that state lawmakers view and go about developing the annual spending plans doesn’t work well—and the unbalanced budgets reflect this.