The state budget circus continues
At this writing, with the days ticking by, state lawmakers still had delivered just half a budget to Gov. Tom Wolf.
Last week, the Legislature sent Wolf a $31.5 billion spending plan for the fiscal year that began July 1. Just one problem: They didn’t figure out how to pay for all of it.
So now begins the process of coming up with enough money to fill the shortfall that exists in the budget framework. Those negotiating the revenue issues say more than $1 billion is needed, and with every House member and half of the state senators facing re-election in November, we can rest assured the state income tax and the sales tax will not be rising.
The state’s fiscal house is in disarray, in large part because of an ongoing pension crisis that was created by past legislators and virtually ignored by those who have followed. To really address the issue would require a major infusion of cash, the type that could be raised only by increasing one or both of the two major tax streams noted previously.
Since we’re assured that sort of bold move is not forthcoming, the Legislature will, as they have done many times before, kick that crisis down the road. In the short term, though, they must come up with the money to balance the current year’s budget, and the discussions in Harrisburg are focused on so-called sin taxes.
According to an Associated Press report, House Republicans “have continued to back a $1.2 billion revenue proposal built on higher tobacco taxes, back taxes from tax delinquents, the expansion of legalized gambling and the expectation of brisker wine and liquor sales under a new law that liberalized alcohol policies.”
This conjures an image of a juggler trying to keep more and more balls in the air. Everything in the House proposal no doubt would have to go just right in order for the revenue target to be met. How many times, in recent memory, have the Legislature’s budget efforts worked out that way? We’ve heard that there might be a $1-per-pack increase in the tax on cigarettes. When figuring out the revenue from that, are lawmakers taking into account how much money might be lost if some smokers are pushed to finally quit the habit? Are they taking into account how many smokers who live within a reasonable distance of a border state with lower taxes might pop across to buy their smokes?
Counting on revenue from expanded wine sales via private businesses also is fraught with uncertainty. If we’ve learned anything about state government, it’s that the time frames for rolling out new enterprises usually are overly optimistic.
As for the plan to make Pennsylvania just the fourth state to allow legal internet gambling, do we really need to make it that easy for people to be parted from their money, just so our lawmakers can be spared from making tough decisions?
Then, says the AP, there’s a proposal that’s being kicked around by Democrats to resurrect a “gross receipts tax on the natural gas delivered to nearly 3 million homes and businesses.” The tax was 5 percent when it was eliminated in 2000. It cost the average household $55. Again, it’s legislators picking who gets gored and who doesn’t. Heat your home with gas? Sorry about that.
The governor, to his credit, has shown no interest in signing the budget framework without an accompanying revenue plan. But at midnight July 11, the budget – with or without the revenue in place to fully support it – will become law without the governor’s OK, unless he issues a veto.
Stay tuned to see whether you’ll be a winner or loser in the latest Harrisburg budget game.