Standard & Poor’s is sounding the alarm, once again, on Pennsylvania’s record of overspending. A new S&P report singles out the commonwealth for not putting our fiscal house in order, spending more than revenue, and not preparing for the next downturn in the economy.
As USA Today notes:
Of the states singled out by S&P, the State of Independence has the largest projected state reserve decline: 83.8%. The problem is the budget is out of whack, S&P says. “The budget is not structurally balanced and relies on one-time savings, deferrals and other measures that add uncertainty,” S&P says, adding that it “could leave the state ill-prepared for a downturn.”
As we noted previously, the state has been spending more than revenue for 6 consecutive years now (see chart below) and has yet to completely close the budget gap left by Gov. Rendell. Moreover, with rising pension costs, the funding gap is predicted to grow.
For recommendations on how to build a better fiscal foundation for our future, check out our latest policy report, Blueprint for a Prosperous Pennsylvania.