Overspending takes state tax collections triggered by economy
For years state government in Pennsylvania has struggled on both ends of its budget process with tax collections lagging behind projections.
Either the collections are lower than expected in an existing budget, leaving a deficit, or they are so iffy for the future that they create revenue angst during budget discussions.
Thanks to the best economy the state has seen in at least a decade, that problem has been turned into a bright spot in Pennsylvania’s budget picture, both now and for 2019-20.
The state Department of Revenue’s latest report shows tax collections up $828 million, or 3 percent, above expectations through 10 months of the current fiscal year. It has collected $29.2 billion through 10 months, a bump of 7 percent in tax revenue over the same point last year.
That’s what happens when employment is at record numbers and the unemployment rate is nearing historic lows. When people work, they pay taxes. A percentage of that is state taxes. As the department report shows, the impact is measured in millions of dollars.
People can argue about the policies that have created the economic upswing, but there is no arguing the impact. It has been hugely positive for Pennsylvania.
Unfortunately, the Wolf administration has not lived by the enacted budget of $32.7 billion for 2018-19.
The proposed budget of $34.1 billion includes a request for $500 million to pay for costs rung up since the passage of the current budget.
A 6 percent spending increase already is too much from one budget year to the next.
But the administration should not be given a penny over this year’s budget until someone explains how it managed to ring up a half billion dollars in new expenses over the past 12 months.
And this should not happen again without a more public airing of what’s going on.
The state’s taxpayers — not its government — should be the chief benefactors of the economy that is producing a revenue collection windfall.