Category: Budget

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Two Approaches to the State Budget

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

It’s becoming more and more rare to see serious attempts on the part of newspapers (and their virtual counterparts) to compare policy proposals meant to deal with a serious public issue. That’s one reason I was so happy to see Tim Stuhldreher’s excellent piece, “Pennsylvania think tanks battle over remedies for $1.7 billion state budget deficit” in LancasterOnline. The other reason I was happy is that the article demonstrates the difference between a serious proposal that actually tries to find a solution to the budget deficit—our Fair Share Tax Plan—and the Commonwealth Foundation’s right wing wish-list, which barely even gestures towards a solution. What, according to the piece, does the Commonwealth Foundation propose to close our state budget deficit? And what’s wrong with those ideas? They propose: Putting new state employees in a 401(k) pensions—even though Republicans have failed time and again to find such a proposal that actually reduces… Continue reading

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Is This the Year PA Resolves its Perennial Budget Crisis?

  By Pennsylvania, Pennsylvania Budget

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

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Combine Spending Restraint With New Revenue

  By Pennsylvania, Pennsylvania Budget, Public Policy

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

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Pennsylvania Needs a Fairer Tax System

  By PA Budget and Policy Center, Pennsylvania, Pennsylvania Budget, Published op-eds

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

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The rich can take the hit–to fix the budget they should pay their fair share.

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes, Published Op-Eds

Marc Stier | 01/17/2017 Blog This piece originally appeared on Pennlive, December 23, 2016. You remember how Lucille Ball would work her way into some kind of predicament and then look around and wonder how she got there? That’s how our state legislators seem to look at the budget deficit we are stuck with right now. They are looking around wondering how the current Pennsylvania budget deficit, which approaches $3 billion for this year and next year together, happened. But it didn’t just happen. It was the product of a series of long-term and short-term decisions made by legislators, sometimes with the help of our governors. Let’s start, however, with what did not cause the budget deficit, because too many of our legislators, like Lucy, want to blame someone else for the mess they have made. Growth in state spending is not the cause of budget deficits. From 1994 to… Continue reading

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Combine spending restraint with new revenue

  By PA Budget and Policy Center, Pennsylvania Budget, Pennsylvania State Taxes, Published Op-Eds, Taxation

This piece originally appeared in the Erie Times-News, 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… Continue reading

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On The Mid-Year Budget Briefing: The Full Picture Is Even More Grim

  By Budget, PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

Budget Secretary Randy Albright’s mid-year budget briefing this week brings worrisome news that, at its current level of expenditure and revenues, the Pennsylvania budget for the 2016-17 will have a deficit of $600 million. Part of that deficit is the result of lower tax revenues than were projected when the budget was enacted in July. Another part is higher human service caseloads, which will require a supplemental appropriation.   The projected deficit might increase again if the General Assembly does not enact legislation to bring in $100 million in internet gaming revenues and if a second Philadelphia casino license is not sold for $50 million. While the current year deficit is a problem for the state, unfortunately it is not the biggest budget problem we face. The Independent Fiscal Office is projecting a 2017-18 deficit of $1.7 billion, which does not include the ongoing costs of higher human service caseloads… Continue reading

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IFO Report: Deficits Now and In The Future

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

Pennsylvania Budget and Policy Center Director Marc Stier made the following statement following the Independent Fiscal Office release of their Five Year Economic and Budget Outlook: “The herculean efforts of the Governor and General Assembly to overcome their divisions and reach a budget agreement last year may have enabled legislators to leave town in July. But it left the state with a deficit of at least $524 million for the current year, a projected deficit of at least $1.7 billion for the year beginning July 2017, and budget deficits that grow year after year beyond that. “If the state continues to generate revenue under current laws and maintains the current level of services, the projected deficit reaches $3 billion in 2021-22 and continues to grow by $175 million per year thereafter.  “That conclusion, which is contained in the new Five year Economic and Budget Outlook released today by the Independent… Continue reading

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The Revenue Shortfall and the Budget

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes

Marc Stier | 10/07/2016 Blog Almost as soon as the Pennsylvania budget was passed in July, rumors swirled about the legislature coming back—either in a lame duck session in December or next year—to fix it because it was not truly balanced. The Department of Revenue’s announcement yesterday that revenues for the year to date are running $218 million below estimates, makes revisting the budget even more likely. In July, we at PBPC pointed out that estimates of some of the one-time revenuesincluded in the budget—especially those from selling licenses for internet gaming, for a second Philadelphia casino, and for the expansion of alcohol sales—were possibly over-stated. We also said that we were not confident that enough money was appropriated to meet the likely caseload for medical assistance (The Commonwealth must appropriate its share of funding for these programs to continue to draw down the federal funding for them.) Those problems… Continue reading

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Your Activism (and C3 Dollars) at Work

  By Budget analysis, PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

This is the second in a series of blog posts assessing the 2016-17 budget and the budget negotiation process from PBPC and its allies. Politics takes patience. Victories take time. And that goes for small victories as well as big ones. While the 2016-17 Pennsylvania budget leaves much to be desired, it does close about half of the structural deficit this year with recurring revenues; that is, revenue that the state will receive year after year. And that revenue mostly comes from a series of good proposals that we at the Pennsylvania Budget and Policy Center have championed over the years. One is the provision to close the sales tax vendor loophole. Stores, including big box retailers like Wal-Mart and Home Depot, have up until now been allowed to keep a portion of the sales tax revenue they receive from customers. That provision in the tax law in Pennsylvania and… Continue reading