The PA House GOP Budget Plan to Raid Special Funds Explained

The Pennsylvania House Republican plan to balance the budget in part by raiding other state funds is something of a moving target. A new amendment Representative Moul (A03286) to House Bill 593 is the legislative vehicle in which elements of the plan will move to the floor of the House as early as today. We want to take a step back and put the whole plan to use supposedly “surplus” money that is “sitting around doing nothing” into perspective. This plan rests on a fundamental confusion between bank balances and budgets, one that has played a role in the life of most married couples once or twice. And perhaps the easiest way to understand it is to consider a scenario not unfamiliar to most of us. One partner — I’m going to make him the husband in this version but it doesn’t have to be — picks up a flyer from … Continue reading

Pennsylvania’s Budget Choices This Year

As we head into what everyone hopes will be the last month of the Pennsylvania budget season, this is a good moment to take stock of where we are and what’s at stake in the decisions the governor and General Assembly will make this year. Doing so will also explain why the Pennsylvania’s Choice campaign is urging people to attend a tele-town hall on the budget at 7:15 on June 1, a budget rally at noon on June 5 in Harrisburg, and lobbying days later in the month. (More information and registration for these events can be found here.) Continue reading

It’s not just a number

Originally published at ThirdandState. The Congressional Budget Office (CBO) analysis of the Republican health care plan, the ACHA, released today shows the danger of Congressional action in advance of a serious analysis of the impact of legislation. Though it was touted as a new and improved version of the bill that failed in March, the CBO analysis shows the bill that passed the House is no better, and in some ways, far worse. The CBO estimates that, at the end of ten years, 23 million fewer Americans will have health insurance because of the legislation, which is one million less than the estimate of their earlier bill. Most of the lost health insurance created by the AHCA is the result of the slow repeal of the Medicaid expansion and the replacement of the federal entitlement to traditional Medicaid by a per-capita cap on federal funding of the program. These devastating … Continue reading

The Trump Budget

Originally published at Third and State.   President Trump’s budget is a triple betrayal of his campaign promises, of working people in Pennsylvania and around the country, and of a uniquely-American economic order that has created the shared prosperity that America once enjoyed and should enjoy again. The President is, first, betraying his promise not to cut Medicaid, Social Security, and the social safety net, that is, programs relied on by those left behind in a changing economy. In doing so he is, second, betraying the promise that America has made to working people to ensure that they have the important assistance to meet basic living standards: food on the table, a roof over their heads, and access to health care that millions of Pennsylvanians rely on. The budget proposal calls for a huge reduction in these vital programs in order to give massive tax breaks to the wealthy and … Continue reading

Health Care Again

Originally published at Third and State April 21, 2017.  News reports indicate that, as many of us had feared, the Republicans in Congress and President Trump have not given up on their effort on health care, not only to repeal and replace the ACA but to institute a per capita cap on Medicaid spending. The new plan, as we will explain in a moment, is even worse than the last one. But before we get to the details, we need to stop and ask, “why are we here again?” Knowing the answer to that question is critical to understanding what the Republicans propose. Why Health Care: Avoiding the Loser Label There are basically two reasons the Republicans are seeking a mulligan on health care. The first is that Trump and the Republicans promised to repeal the ACA and don’t want to look like losers to their hard-core, right-wing voters and … Continue reading

Facts, Not Hysteria, About the Soda Tax

Originally published by the Philadelphia Business Journal on April 20, 2017. Also at Third and State.  Co-authored by Diana Polson. The reaction of the beverage industry to the Philadelphia soda tax continues to be self-centered, hysterical, and dubious. Before looking at their claims, let’s keep in mind something very important: every tax has some negative consequences for some businesses. And, yes, it is a shame if some business absorbs some costs and a few people lose jobs as a result. But public policy has to be driven by the consequences for all of us. So, the question is not whether an individual business is hurt by the Philadelphia soda tax, but whether the city and its citizens benefit on the whole. We think the answer is clearly yes, not just because of the investment in Pre-K education and community recreation centers made possible by this tax, but because of the … Continue reading

The House Republican Budget Proposal

The House Republican Budget proposal for 2017-2017 is deeply problematic in six respects. First, the proposal does not close the state’s budget deficit, but leaves a gap of close to $800 million. Most of the revenue ideas presented by the House Republican Caucus to fill that gap are similar to the one-time revenues and fund transfers that have failed to fix our structural deficit in the past. The Republicans do not seem to be considering any proposal to increase recurring revenues by fixing our upside-down tax system. Second, the House Republican budget widens, rather than closes, the state’s investment deficit, especially in education, environmental protection, human services, and community and economic development: Education: It proposes $50 million less for Pre-K education and Head Start than the Governor’s budget, as well as eliminates the $8.5 million safe school initiative. Environmental Protection: It proposes $9 million less than the Governor’s budget for … Continue reading

Is this the year Pa. resolves its perennial budget crisis?

Originally published in the Philadelphia Inquirer, December 28, 2016. Many of us who write about budget politics have a keyboard shortcut to enter “Pennsylvanian Budget Crisis” into a document. Year after year, we write in December about the upcoming crisis and again in July (or sometimes far later) about how the crisis has been temporarily averted. It is crisis time again. But perhaps this is the year we can change the script. There are new ways to do something that has eluded us in the past – solve the crisis on a long-term basis without imposing harsher new taxes on working people and the middle class. Before coming to our long-term solution to the crisis, first a word about its dimension and cause. The Independent Fiscal Office has projected that the deficit for the current fiscal year, ending June 30, will be $500 million while the deficit for the next … Continue reading

Combine spending restraint with new revenue

Originally appeared in the Erie Times, December 28, 2016 Pennsylvania has been struggling with persistent budget deficits since the start of the Great Recession in 2008. And we at the Pennsylvania Budget and Policy Center have been recommending a “balanced approach” to resolving the deficit from the beginning, one that combines restraint in spending with new revenues. But since 2010, under Govs. Tom Corbett and Tom Wolf, the General Assembly has adopted an unbalanced approach. Spending has gone down but revenues have gone down faster. From 1994 to 2011, under both Democratic and Republican governors, the state spent 4.7 percent of the state’s gross domestic product. During the Corbett years that fell to 4.3 percent as spending on education and human services were sharply cut. And while, thanks to Wolf, the state has been able to restore some of those cuts, spending in the last two years remains at the … Continue reading

Pennsylvania needs a fairer tax system

Originally published by the Pittsburgh Post-Gazette, December 26, 2016 Our proposal would be more equitable while also helping to close the deficit Pennsylvania faces another budget crisis. The combined deficit for this year and next is roughly $3 billion. It’s time all Pennsylvanians — and especially the members of our General Assembly — recognize that recurrent budget crises won’t stop until we fix our upside-down tax system. Federal tax rates are higher for those with higher incomes than those with lower incomes. However, combined state and local taxes, because they rely on property taxes, sales taxes and income taxes that do not have steeply graduated rates, often tax those with low incomes at roughly the same percentage as those with high incomes. Pennsylvania is worse than most states on this score. It is one of what the Institute on Tax and Economic Policy calls the “terrible 10” when it comes … Continue reading