Sunday, July 2, 2017

Pennsylvania’s 2017 Budget Is Approved

           The Republican-led General Assembly passed and liberal Democratic Governor Tom Wolf signed into law the Commonwealth of Pennsylvania’s fiscal 2017 budget before the end of the fiscal year June 30. 

            The budget permits $32 billion in spending, an increase of 3% over last fiscal year.  The fiscal blueprint achieves this level through a combination of spending increases and cuts.  Like last year, Wolf had wanted more spending increases for education.  He and the legislature did agree on some consolidations of gubernatorial administration offices and there are savings from decreased corrections costs.  There are extra funds in the budget for pensions, but no significant reform, even though the lack of it is the largest cause of fiscal distress for Pennsylvania, as well as its counties, municipalities and school districts.  The Commonwealth faces a two or three-billion dollar budget shortfall.           

            The legislature still has approved no revenue bill to fund the new budget.  As usual, the Governor and the Democratic minority in the legislature are looking to increase taxes.  They are again singling out one industry, the natural gas extraction industry, for additional taxes, on top of the extra taxes gas drillers already pay.  The Republicans are seeking to raise additional funds from wine and liquor privatization and are even looking to borrow.  Many legislators have become addicted to gambling expansion for revenue increases. 

           The General Assembly should continue to be fiscally responsible by resisting tax increases, especially those that single out one industry, while avoiding the temptation to borrow or expand gambling even further, and instead privatize wine and spirits, while approving more prudent spending decreases, especially through pension reform.

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