Back to the Future: Budget Edition

Doc Brown showed up at Commonwealth Foundation headquarters in his DeLorean yesterday with a stern warning about the future.

“I just returned from 2017! You’ve got to come back with me, it concerns you all,” Doc warned.

“What happens to us in the future? Do we become jerks or something?,” I asked. After pausing and contemplating his answer, Doc said, “No you all turn out fine. It’s next year’s budget I’m worried about.”

Doc proceeded to tell us the revenue estimates used to balance this year’s budget—the result of passing a too-high spending plan with no plan to pay for it—were overly optimistic. Revenues from sin taxes—including wine reform, gambling, and cigarette taxes—didn’t come in as projected.

Moreover, cigarette taxes continued to decline, as more Pennsylvanians stopped smoking or started smuggling cigarettes from across state lines. The money from gambling expansion was also frontloaded.

To balance the budget—while not actually balancing it—lawmakers borrowed from the State Workers Insurance Fund. This is money Pennsylvania taxpayers had to pay back.

A budget provision allowing the administration to borrow from the Workmen’s Compensation Trust Fund to pay Medicaid bills was used to spend an extra $200 million in additional welfare costs. Taxpayers have to pay that back, too.

All of these mistakes led a budget deficit—where lawmakers spent more money that we had in revenue.

“Great Scott!” Doc Brown exclaimed. “Next year they are planning to raise the income and sales tax to pay for this fiasco.

“Get in the car, we’ve got to get back to the future and stop this broad-based tax hike!”

“Wait a minute, Doc,” I said. “None of these things has actually happened yet. Can’t we stop this nonsense now, if we simply lower the spending?”

“Great Scott! You’re right. If we reduce spending now, we create an alternate reality in which none of this disaster takes place.”