A Budget Balanced in Name Only

Finally, with the passage of a revenue bill to fund the appropriates bill passed last wee, we can say the 2016-2017 budget is done. But whether it was a success or not, is very much in doubt. The budget deficit is, technically closed. New projected revenues of $1.3 billion have been enacted. But as the following table shows, over half of the new revenue is non-recurring. That is, it is one-time revenues that will be available only this year and not in future years. That means we will start the 2017-2018 budget year already more than $700 million in deficit. New Revenue in 2016-17  (in millions of dollars) Recurring Revenue Non-recurring revenue Cigarette Tax 431 Tax amnesty 100 E-Cigarettes 13 Internet gaming 100 Smokeless Tobacco 48 Liquor licenses 149 Roll you own 3 Casino license fee-Philadelphia 50 Cap sales tax vendor discount 56 Table games license fee 25 Sales tax… Continue reading

Statement On the General Assembly Passing a Revenue Bill (HB 1198)

Pennsylvania Budget and Policy Center Director Marc Stier made the following statement on the General Assembly Passing a Revenue Bill (HB 1198): “The General Assembly finally acted today to meet its constitutional responsibility by voting to raise the $1.3 billion in revenues needed to fund the recently passed appropriations law. But while the revenue package may technically balance the budget for 2016-17, in three respects it does not solve the long term fiscal problems of Pennsylvania.   “First, too much revenue ($709 million) comes from one-time rather than recurring sources ($627 million). As a result, the state’s long term structural deficit has not been closed. Next year will bring another debate about how to fund the government over the long term. “This problem is exacerbated by a second one: the revenue package relies too heavily on dubious sources. Expected revenues from liquor privatization, internet gaming, the license fee for a… Continue reading