State budget cannot be constructed on shaky foundation of wishful thinking
Much criticism has been heaped upon Pennsylvania Gov. Tom Wolf for a number of his decisions related to the coronavirus pandemic, and much criticism of the state’s chief executive will be forthcoming in response to ideas he put forth in his 2021-22 budget address.
No surprise. Democrat Wolf himself realized, going in, that much of the message he delivered virtually, by way of a pre-recorded video from the governor’s residence, would not be welcomed or embraced, especially not by the Republican-controlled General Assembly.
The address began the Commonwealth yearly budget preparation exercise — nothing more. The completed budget, based more on GOP lawmakers’ ideas and priorities than Wolf, won’t emerge until about June 30, the end of the 2020-21 fiscal year, perhaps later.
The certainties at this point are that Wolf’s proposals to raise income taxes on higher earners, enact a severance tax on the state’s large-scale natural gas industry and tax municipalities to help pay for State Police services will not survive.
The word “premature” also should hold a prominent place in evaluations of what the governor said during his address.
Wolf wants a personal income tax increase on the budget-negotiating table before he and the Legislature know how much the Commonwealth will be receiving in pandemic financial assistance from the federal government. Such early, unnecessary and uninformed discussion would detour budget preparation from areas in which significant progress may be possible, based on confirmed data.
Even though the governor has tied the proposed tax increase to the laudable goal of helping education and beefing up social services, taxpayers can be excused for objecting to any tax increase during this difficult time for which COVID-19 is responsible.
Meanwhile, during Wolf’s six years at the gubernatorial helm, no “stomach” has evolved in the Legislature for enacting a natural gas severance tax. That isn’t destined to change this year, when that industry is beset with numerous challenges.
Likewise, not enough support will be mustered for an assessment on municipalities that don’t have a police department of their own. Many lawmakers look upon that as a political “hot potato.”
Then there is the reality that many lawmakers, amid the pandemic, are uneasy about the size of Wolf’s proposed spending plan of $40.2 billion — more than $41 billion if Wolf’s request for an additional $903 million is granted to pay for the State Department of Human Services costs that are expected to exceed agency appropriations during the current fiscal year.
In numerous recent years, the Legislature has employed “creative solutions” for budget-balancing such as borrowing money from outside accounts — off-budget program reserves — that in reality should not have been touched.
The governor’s budget documents indicate his proposal is a $3.788 billion, or 11.1-percent increase over the current 2020-21 budget that expires on June 30. However other calculations say Wolf’s proposal reflects a roughly $4.85 billion, or 13.4-percent increase in anticipated spending.
It is clear that this budget preparation exercise might test the Legislature and governor like no budget task before it, and the pandemic will pose challenges for numerous fiscal years beyond — challenges that the new budget should acknowledge in the decisions forthcoming.
The upcoming budget must not be constructed on a shaky foundation of wishful thinking.