State budget challenges demand long-term fixes
Gov. Tom Wolf’s budget annual address is on the horizon, and so is a staggering budget deficit.
Pennsylvania is barreling into the 2017 fiscal year with a massive structural budget deficit of $1.7 billion. The independent Fiscal Office expects that number to climb to $3 billion by 2021.
What’s the solution?
So far the biggest idea coming out of Harrisburg belongs to Wolf, who is proposing the consolidation four state agencies: the departments of Aging, Health, Drug and Alcohol Programs, and Human Services.
Collectively the departments have more than 18,000 employees. They would all be folded into a single department that would oversee the state’s health and human services programs, with “minimal” layoffs and no program cuts, according to administration officials. Wolf still hasn’t said how much he expects to save through the move, but it isn’t likely to be a game-changer if administration officials are using words like “minimal.”
Furthermore, on Tuesday Wolf announced that he will be seeking another $10 million to combat the opioid epidemic. The money would go to help law enforcement agencies and first responders buy the overdose antidote naloxone.
Let’s be clear: $10 million is a drop in the bucket when it comes to Pennsylvania’s budget, which last year came in at $31.5 billion. And expanding access to naloxone, which the administration says has saved more than 2,300 lives since November of 2014, is a very worthy cause.
But if the overarching conversation is about finding cost-savings in the upcoming round of budget negotiations, it’s hard to see how legislators and Wolf are going to hit a reasonable number without either tax hikes — which Wolf has said he won’t seek — or significant compromises — which in the past both sides have been unwilling to make.
How about a resolution on things like pension reform, and an end to the unproductive back-and-forth over a natural gas severance tax for starters? How about finishing work on that gambling expansion Republican lawmakers said would funnel $100 million in license fees into the current state budget, but then never materialized?
If you need evidence of the upcoming negotiations’ potential for bitterness, look no further than the state’s two major think-tanks. The left-leaning Pennsylvania Budget and Policy Center, which wants to increase revenue through more taxes on the wealthy. The conservative Commonwealth Foundation wants to hold the line on taxes and find savings through pension reform and cutting government. You can’t get much further apart on policy than that.
And none of this even takes into account the financial pain that could be created by a repeal of ObamaCare or reforms to the federal tax code — two things state officials have no control over whatsoever.
Pennsylvania is not alone when it comes to red ink this budget season. A national survey by The Pew Charitable Trusts found that at least 31 states are facing shortfalls in their current budgets.
Is it too much to hope that the extraordinary challenges we face will prompt state officials into reaching for extraordinary solutions — namely long-term policies rather than posturing followed by last-minute deal-making? We’ll find out shortly.
