Five Facts About the 2014 State Budget
On June 30, the General Assembly passed a $29.1 billion budget, sending it to Gov. Corbett for his approval. While Gov. Corbett is taking time to review it, here are five facts you should know.
1.) Limited spending growth: The General Assembly’s budget represents a spending increase of 2 percent over the prior year’s budget. This is consistent with Taxpayer Protection Act, which calls for limiting increases in state government spending to inflation and population growth.
In fact, the budgets over the past four years have limited spending, with an average growth of less than 1 percent. In contrast, spending increased at double the rate of inflation over the previous 8 years, and has increased by an average of 6.2 percent per year since 1970.
2.) No new taxes: Lawmakers did not include any new taxes in this year’s budget, despite pressure from outside groups pushing to increase the tax burden on working Pennsylvanians.
Not only did lawmakers resist calls for a unfair severance tax, which would have hurt farmers like Shawn Georgetti, but they also moved forward with the phase out of the Capital Stock and Franchise Tax after years of delaying its elimination.
3.) State spending exceeds state revenues: For the seventh consecutive year, state spending will exceed state revenue collections. This is possible due to one-time transfers from other funds and one-time revenue collections.
While the state revenue sheet appears balanced, lawmakers will still have to make tough decisions to deal with our long-term fiscal challenges, which threaten the state’s fiscal health and economic growth.
4.) Overall spending, including education spending, is at an all-time high: Despite the myth being touted by government union executuves, Gov. Corbett and Republican lawmakers did not cut $1 billion from public schools.
In fact, state spending on education will be at the highest level ever this fiscal year. Of course, more education spending does not automatically translate into better student outcomes, absent reform.
5.) Missed opportunties: The legislature will not pass meaningful pension reform and liquor privatization before the General Assembly breaks for summer recess. Moreover, they delayed action on paycheck protection for the time being.
But those issues aren’t going away just because lawmakers have recessed for a few months. The importance of addressing the state pension crisis, delivering the alcohol convenience most Pennsylvanians want, and ending the use of taxpayer resources to fund partisan politics will be just as great when lawmakers return in September.
Stay tuned and stay engaged!