Harrisburg – “The final state spending plan is about as good a result as could be negotiated within the money available.
When you are facing a $4.2 billion deficit, you are not going to be able to do everything you were able to do previously.
It was clear from the outset that taxes were not going to be increased, and we would not have money to replace federal stimulus dollars. The situation was not going to improve if we delayed passage beyond the deadline, and we know from experience how that approach can negatively impact groups relying on state dollars.
Nearly every area of state support is affected.
The numbers are a lot better than first proposed for both secondary and higher education, but it will still necessitate tough choices on the part of education officials.
In recognizing the difficult financial situation school districts are facing, the General Assembly allocated $50 million of legislative reserves to restore funding to the Accountability Block Grant program, which provides key discretionary dollars to allow schools to decide how best to spend available funds.
Additional restorations to hospital funding will help sustain access to health care.
Although all of the cuts were not as dramatic as originally projected, the situation still necessitates finding ways to improve government efficiency.
This budget assumes that there are huge savings to be achieved by taking a hard look at welfare spending. Until the review is done, no one knows what amount of money can be reclaimed by clamping down on fraud and abuse. If those estimates are too high, then the surplus money held back this year will be needed to fill in the gaps.
While state revenue collections have shown a slight increase, other key indicators, such as jobs and home sales, have not rebounded to the degree that would give confidence that a robust recovery is occurring. Unless something changes, next year’s budget promises to be a difficult one.
In the past, one of the things that got Pennsylvania into trouble was spending every available dollar. People know that does not work in their personal finances and asked for a more fiscally responsible approach. One way to accomplish this is to keep some money on hand in the event that the economy does not recover as quickly as we hope.
The hard reality is that whether we have a Marcellus Shale tax or a fee, the bulk of the money will be directed to local impacts. The money is not going to be available to fill big holes in the state budget.”
Contact: Jennifer Wilson