Dec 19, 2016 3 min read

An editorial opinion from the Beaver County Times:

As its name indicates, Pennsylvania’s Independent Fiscal Office is supposed to be a nonpartisan agency.

Its function is to prepare revenue projections for the governor and state lawmakers to review in preparing the state budget. The agency specifically stays away from supporting policies, only giving the facts and figures of its revenue projections.

In other words, taxpayers should be able to trust the numbers in its reports since the office is not supposed to be influenced by politics.

If that is indeed the case, then all Pennsylvanians should sit down and take a good, hard look at some recent numbers compiled by the office.

In a special five-year outlook, Matthew Knittel, the director of the office, noted that the state could face a budget deficit of $500 million by the end of the current fiscal year next June.

He added that budget deficit could expand to $1.7 billion the following year and $3 billion by 2022 if there’s no change in the state’s current financial plans.

In the short term, Knittel said the deficit could be blamed on the state relying on optimistic revenue projects, a slowdown in the economy in the first quarter and the General Assembly not following through with plans to raise $150 million by enacting an internet gaming bill and selling a second casino license in Philadelphia.

In the long term, he said the state will face a number of challenges related to the deficit, including:

• Funding shortfalls for the Department of Human Services that could require supplemental appropriations of $388 million in 2016-17. These potential supplemental expenditures have implications for multiple fiscal years.

• A decline in revenues and savings over time from the 2015-16 budget. The recent budget package produced revenues and savings of nearly $1.1 billion in the current year, but the net impact declines to $41 million by 2021-22 as one-time revenues expire and loan repayments and funding shifts take effect.

• A 14 percent increase in the number of people over the age of 65 in the next five years will hold down tax revenues and increase health care and other expenditures associated with the long-term care of the elderly.

So, it’s clear that unless changes are made to current policies, residents across the commonwealth could be facing major tax increases, massive cuts in social services or both.

This calls for some good-faith talks on both sides to find some sort of compromise on these issues. But that seems very unlikely.

With Gov. Tom Wolf set to run for re-election in 2018, passage of this year’s budget is expected to be very contentious. Republicans have increased their majorities in both the House and Senate. How likely they’ll be willing to compromise with Wolf remains to be seen. It also seems rather unlikely that Wolf will be reaching across the aisle in hopes of finding common ground with GOP lawmakers.

In one way, the battle has already begun. State Sen. Scott Wagner, who has announced plans to seek the GOP nomination for governor, and Wolf are blaming each other for the proposed furlough of 520 employees in the Department of Labor and Industry.

While they’re dueling it out, the employees are scheduled to be laid off shortly before Christmas. Not only will the employees suffer, but taxpayers could be affected as the employees help those seeking unemployment compensation.

Unfortunately, Pennsylvania residents are in store for more of these deadlocks in the coming year. Next year’s budget talks could make the record-setting impasse of 2015 seem like child’s play.