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PA's brain drain budgets aren't making things better

If you’re a cynic, you would probably say we were always destined to end up here: one week into the state’s new fiscal year with an unsigned budget, a looming structural deficit and no real plan from lawmakers for how to pay the tab.

It should be familiar territory. Remember last year when the exact same chain of events transpired? And perhaps, in April, when we posited that the state’s budget process was destined to end in a better place, we gave lawmakers too much credit. Because they certainly don’t deserve any for the lazy and haphazard way they’ve approached this budget cycle.

Here’s a rundown of the state’s budget-building process this year:

In February Gov. Tom Wolf proposed a $32 billion budget that included $2 billion in proposed cuts. Wolf’s proposal also included a severance tax on natural gas, a minimum-wage increase to $12 per hour, ended hundreds of millions of dollars in giveaways to corporations and imposed a $25-per-person fee on municipalities that rely on Pennsylvania State Police coverage.

It was a refreshing move toward the center for a Democratic governor who, in his first two budget cycles, fought very hard for a more expansive (and expensive) version of state government that neither taxpayers nor the General Assembly supported.

In April, House Republicans answered Wolf’s proposal with their own $31.5 billion budget that doubled down on spending cuts. The House budget sought spending cuts to state programs that help low income families with child care expenses, eliminated funding for several economic development programs, and trimmed more than $20 million from the operations budgets for the House and Senate.

The problem was that despite those cuts and more, the plan still needed nearly $800 million in new revenue to actually balance the state’s income with its expenses after lawmakers rejected a $1 billion tax package in Wolf’s plan.

On June 30, at the last minute, legislators sent Wolf a $32 billion budget that, for the second year in a row, failed to account for billions of dollars in expenses.

So here we are again. And while lawmakers bleat about fiscal pain and trade on their self-bestowed titles as champions of the taxpayer, they embody some of the worst impulses of cash-strapped individuals and organizations.

Need examples? Let’s take a look at their big ideas for how to close the budget gap this year: borrowing money against the state’s share of a 1998 settlement with tobacco companies, expanding casino-style gambling (via video terminals) to bars and truck stops, and selling more wine and liquor licenses.

These ideas range from lazy and shortsighted to downright predatory.

Borrowing against the tobacco settlement would cost the state nearly a billion dollars in interest payments over 20 years. If you truly believe the problem is spending, the answer isn’t piling more debt service onto the budget.

Selling more liquor licenses is actually a good idea. The state needs to get out of the wine and spirits business entirely. But those sales are one time injections of revenue, not a sustainable source of income for the state. Deploying this kind of budget balancing gimmick is what helped create the fiscal problems with which Pennsylvania is currently struggling. Have lawmakers learned nothing?

But it is the House’s gambling expansion proposal — dead-on-arrival in the Senate, thank goodness — that reveals the extent of their willingness to exploit taxpayers to avoid making difficult and unpopular decisions. Strapped for cash? No problem: put a gambling terminal in front of people who are drinking or bored and see how much money you can make — never mind that it will likely cannibalize current revenue from casinos and the state’s already-flagging lottery, or what effect it might have on neighborhoods as people gamble away their paychecks at the local watering hole.

This is no way to build a budget or address the state’s mounting fiscal issues. For all the legislative hand-wringing over our so-called spending problems, the real problem we see is brain drain among the people who are supposed to be working toward leading the state out of this mess.

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