Wednesday, December 23, 2015

Update on the Pennsylvania Budget: the Legislature Passes a Balanced Budget with no Tax Increases

           The Republican-led Pennsylvania General Assembly approved by nearly a two-thirds majority a balanced budget for the 2015 fiscal year that began July 1 that does not raise taxes.  The bill received bipartisan support.  It is now up to liberal Democratic Governor Tom Wolf to sign, veto or allow the bill to become law without his signature.

            The budget impasse—the longest in Pennsylvania in 45 years—was created by Wolf’s vetoes of previous balanced budget bills that did not raise taxes, including a stop-gap measure, as he demanded dramatically more spending and taxes.  He even opted not to exercise his line-item veto authority to remove the provisions he opposed and sign into law the majority of the bills he favored.  Wolf, the most liberal Governor in the American Union, refused to release funds to schools or contracted public service agencies or to pay certain vendors or employees in order to create a crisis to try to exert political pressure on legislators to give into his demands. 

            The measure approved by the legislature authorizes $30.3 billion in spending by the Commonwealth, which is less than Wolf demanded, but is nonetheless a 3.7 increase, including $300 million more for schools than in the 2014 budget, which were already receiving a record amount. 

The plan lacks any much-needed pension reform for public employees or alcohol privatization, both of which were priorities for conservative Republican legislators.  All House Democrats had voted yesterday against a pension reform compromise that had been agreed to by Wolf and the Senate in exchange for more taxing and spending because the minority caucus in the lower chamber opposed shifting any future employees into even a less-costly hybrid plan, while a majority of the GOP caucus opposed the measure because it would have led to inadequate savings and underfunded the state pension plans without producing any savings for the current fiscal year.  Because Wolf and the legislature could not agree on adequate pension reforms that could be supported by a majority of the House, a majority of neither chamber of the legislature could support a tax increase to fund Wolf’s proposed spending spree.  Pension reform would be among the ways for the Commonwealth to reduce wasteful spending to avoid future tax increases or even to reduce taxes, as Pennsylvania already has one of the higher burdens for personal and business taxes.  Alcohol privatization would increase state revenue through the sales of licensing and the collection of more taxes from sales with better consumer convenience, selection and pricing.

            After agreeing to the Senate compromise, Wolf blamed the crisis he created on the House for not giving into his demands and concurring with the Senate.  But now that both legislative chambers have approved a balanced budget that significantly increases education spending, despite a decrease in student performance over the last few decades as state spending on education has skyrocketed, he would be solely responsible yet again for extending the budget impasse. 

It is time Wolf recognizes that Pennsylvanians neither need nor want to pay more in taxes for wasteful spending.  Conservatives in the General Assembly have held the line against tax increases.  With the support of conservative private citizens, may these legislators continue to stand firm for fiscal responsibility while continuing to work for adequate public pension reform and alcohol privatization.  

Note: I am among the state employees who have not received compensation for their public service because of Wolf’s budget crisis.  Although it is claimed and reported that state employees have been receiving their pay, I have not received any checks since June for one of the two commissions I hold, as the Administration reclassified us employees commissioned for certain additional services earlier this year as “vendors.”  

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