Pennsylvania’s 2017 Fiscal Authorization Enactment

           Several months after the approval of Pennsylvania’s fiscal 2017 budget, Governor Tom Wolfe, a Democrat, signed the Commonwealth’s fiscal authorization bill approved by the Republican-led state legislature into law last week.  The state had been borrowing since the beginning of July in the absence of the authorization to spend money. 

The fiscal authorization act includes no tax increases to cover Pennsylvania’s budget shortfall, but includes more borrowing from expected revenue from various funds and yet another significant expansion of gambling.  Commercial fireworks are legalized and will be taxed. 

There have been significant budget cuts over the last several years, but there will be no privatization of the wholesale of wine and spirits, which would have netted the Commonwealth a major increase in revenue from the sale of licenses and more volume of taxation through less illegal bootlegging.  The budget approved at the end of June did not include savings from any significant pension reform.  The increased cost of pensions is a major burden on the Commonwealth’s budget.  Other spending cuts, such as additional welfare reform, or the elimination of corporate welfare and tax credits for various favored industries would also help Pennsylvania’s budget significantly.