Pennsylvania must confront a $604 million deficit, according to Budget Secretary Randy Albright. This sober assessment was offered during the mid-year budget briefing earlier today.
The Independent Fiscal Office (IFO) offered a similar conclusion last month when it released a report projecting a $524 million deficit for the current year. The administration’s findings—along with the IFO report—reinforce the need to reverse the problematic budget trends afflicting Pennsylvania.
The present deficit is a combination of excessive spending growth—including $183 million in “supplemental appropriations” or spending above levels authorized in last June’s budget and poor revenue collections. The latter is a problem we’ve been documenting since the fiscal year began.
The good news is both the governor and lawmakers want to avoid broad-based tax increases to close the deficit. Secretary Albright says the governor is asking cabinet secretaries to find ways to cut back on expenses. And House Majority Leader Dave Reed wants to reevaluate the state budget’s structure:
Government has basically looked the same in Pennsylvania for the last 40, 50 years,” said Reed. “We just go through the budget each year . . . We want the budget to look different this year.
The majority leader’s perspective is encouraging. As we’ve detailed in the past, Pennsylvania’s budget is set on autopilot, which means spending continuously grows without review or debate over the sustainability and effectiveness of state programs. A willingness to buck this trend could be a turning point in efforts to curtail spending growth and fix our broken corrections, education, and welfare systems.
Implementing real reforms and cutting back on unnecessary expenses can help the governor and General Assembly avoid tax increases that cost entrepreneurs their livelihoods and fail to solve Pennsylvania’s persistent fiscal predicaments.