Overspending, Not Undertaxing, Created PA Budget Deficit

Why does Pennsylvania have a state budget deficit?

Simple: Overspending.

If the state had grown spending by the rate of inflation and population growth over the last three years, the General Fund would have grown by more than $1 billion…and we’d have a balanced budget.

Instead, thanks to Gov. Wolf’s demands and a $650 million tax hike passed just last year—resulting in lost jobs and slow economic growth—spending grew by a whopping $2.8 billion.

Last year’s spending increase alone amounted to $1.9 billion (more than the entirety of the year-end deficit lawmakers are scrambling to fill). In fact, even after lawmakers passed a $1.5 billion spending increase, Gov. Wolf overspent by another $400 million.

No tax on families’ cable bills, on homeowners’ heating bill, or on bar patrons will solve our fiscal woes—these tax hikes will only exacerbate the problem of spending more than our economic growth allows.

Simply put, unless we adopt structural reforms and slow this overspending, no tax hike will ever be enough.