With the budget for the current fiscal year still in limbo following a failed attempt at agreement in December, Governor Tom Wolf came before a joint session of the Pennsylvania House and Senate Tuesday to present his address offering his 2016-17 fiscal plan.
Unlike last year’s address, in which Wolf offered a message of positivity and hope for the future of the Commonwealth, this year, the Governor chose to offer a scathing criticism of legislators who have failed to commit to funding the needs of Pennsylvania’s citizens.
Noting that ordinarily the address would be an outline for the next year’s progress, Wolf instead pointed out that the state is mathematically in a budget crisis, facing a $2 billion deficit which is “a time bomb, ticking away. If it explodes — if the people in this chamber allow it to explode — then Pennsylvania will experience a fiscal catastrophe the likes of which we have never seen.”
The “explosion” which would result from the inability to meet basic obligations should the House and Senate fail to approve a budgetary plan, Wolf says, “will be felt across the Commonwealth. This year.”
Wolf says that in an effort to continue funding basic education, nearly three-quarters for all Pennsylvanians would see a property-tax increase in addition to those already added, yet “thousands of teacher will be laid off. Guidance and career counselors will be handed pink slips, as well. In all, more than 23,000 education professionals would be immediately yanked out of Pennsylvania schools. Class sizes will balloon by 30 percent.”
“Technical education programs will be cut. Special education programs will be cut,” says Wolf. “Head Start Programs will be cut.”
“Basic state services will also face devastating cuts,” Wolf says, noting that cuts would be required in prescription drug assistance and home and community based services for senior citizens; financial assistance for the mentally ill or intellectually disabled; child care funding, including matching federal funds; and domestic violence and rape crisis centers.
“Critical programs such as these make up nearly three-quarters of our human services budget,” Wolf says. “Simply put, the Commonwealth of Pennsylvania cannot meet its obligations to its citizens if the General Assembly does not meet its obligation to pass a responsible budget.”
Wolf says that the budgetary crisis is the result of “kicking the can” in previous years,
“For years, our leaders tried to balance our state budget on the backs of our children and our schools,” Wolf says. “Instead of finding a sustainable way to deal with our deficit, Harrisburg chose to paper over the problem with a series of budgetary gimmicks and quick fixes. But, sooner or later, the rent is due.”
Citing repeated downgrades by credit ratings agencies as a result, Wolf says, “when Harrisburg doesn’t take our budget problem seriously, the fold who rate our credit stop taking Harrisburg seriously,” resulting in higher interest charges on the state’s $17 billon in debt and costing taxpayers and additional $39 million annually.
Urging members of the General Assembly to once again present a compromise budget for 2015-2016, Wolf says he is unsurprised that there are partisan differences of opinion about what should be funded, but is “asking that they join me in mustering the political courage to meet this crisis head on. This doesn’t require anyone to walk away from his or her principles. It merely requires we each declare that our highest principle is the responsibility each of us has to the people of Pennsylvania.”
In his address, Wolf gave no specifics about his plans for 2016-17. The proposed $32.7 budget, however, includes $1.6 Billion in mandated spending increases for debt obligation; corrections; human services and pensions. Also outlined is a planned $500 million increase in aid to school districts and another $120 million in increased spending on various other line items. In addition to departmental cuts and consolidations in state government, funding for the increased spending would come from an increase in the Personal Income Tax from 3.07 percent to 3.4 percent; a bank share taxt increase from .89 percent to .99 percent; a near-doubling of taxes on cigarettes from $1.60 to $2.60 per pack in addition to a 40 percent tax on other tobacco products; a “promotional play” tax of 8 percent on gambling; an expansion of the sales tax base and Wolf’s long-favored Drilling Severance tax of 6.5 percent, with “Impact Fee Credit.” This
“Sustainable Revenue Package” is projected to triple revenues.
Republicans say this year’s budget is a repeat of last year’s.
“He doubles down on his 2015-16 proposal to include even more runaway spending and massive taxes in this year’s proposal,” says Senate President Pro Tempore Joe Scarnati. “Pennsylvanians certainly cannot afford Governor Wolf’s colossal proposed tax increases.”
Senate Majority Leader Jake Corman called the proposal “a Groundhog Day budget.”
“This retread budget proposal offers superficial changes to his sizable tax-and-spend plan,” Corman says. “The Governor is doubling down on his failures to provide leadership on accomplishing a bipartisan budget agreement and is being disingenuous on the starting point for his ‘new’ proposal.”
House Democratic Leader Frank Dermody says the body should first worry about passing a budget for the current fiscal year.
“We are at least at a half-a-billion dollar deficit if we don’t enact that,” Dermody says. “We need a responsible budget for 15-16, then to move forward with 16-17 on the Governor’s plan.”
Joseph Markosek, Democratic Chair of the Appropriations Committee, says the Governor’s speech “was right on. I don’t know how much you can emphasize it, but we have a huge, huge crisis, and I think there is a disconnect between what we see up here in Harrisburg and what people back home feel. Many of them think there is a crisis, but many of them don’t, and I think what the Governor told was tell the entire Commonwealth that we have a major crisis, but it’s not political, it’s math. We are roughly $2 billion in the hole. We have failed to do the right thing, and we need new revenues, we need sustaining revenues.”
“When you have good, family-sustaining jobs across the Commonwealth, you will have good communities and good schools,” says Speaker of the House Mike Turzai, emphasizing that Republicans feel the Wolf proposal will be harmful to “job creators.”
“Right now, we have an economic growth rate that is less than one percent,” says Turzai. “Unfortunately, the Governor didn’t offer a ‘vision.’ He didn’t put forth the details of his budget. Unfortunately, there was just fear-mongering.”
“The Governor still wants an additional $600 million more in spending for 15-16, but if he were concerned about a gap between spending and revenues, spending an additional $600 million in 15, which multiplies again in 16-17 to $1.2 billion is not closing the gap between revenues and expenditures,” Turzai says.
“It’s absolutely absurd,” says Majority Leader Dave Reed. “The Governor keeps talking about this ‘framework budget,’ but the only part of it he is still proposing is greater taxes and greater spending. I was hoping [the Governor] would come back from Fantasyland, but instead, he left for Neverland. We are not going to rubber-stamp $3.6 billion in higher taxes, for $3 billion in higher spending, and ignore priorities for people across the Commonwealth.”
Senate Democratic Leader Jay Costa says he hopes the Governor’s speech “opened the eyes of the Legislature and of people across the Commonwealth. We have a crisis, and we have to get serious about it.”
“The bottom line is we have to get together and carve out what to do for the people of Pennsylvania, recognizing we have a significant structural deficit that needs to be resolved,” Costa says. “It’s not the Governor telling us that, it’s the Independent Fiscal Office, it’s the ratings agencies telling us we have to get our house in order.”
“Lawmakers have choices to make about Pennsylvania’s future; deal with tough issues up front or watch Pennsylvania wither as a consequence of self-inflicted fiscal wounds,” says Costa. “We need to come together and negotiate a bipartisan budget with the governor that makes key investments in education and deals with a $2 billion structural deficit.”
Corman says “proposals like today’s drive us further apart. He needs to show leadership to bring us together, not delve into politics to drive us apart.”
Lieutenant Governor Mike Stack says “we have to get this solved, and as soon as possible. The bottom line is, we should all be locked up in rooms and no one allowed to leave until this is accomplished. The Governor has had some good conversations with Republicans in the Senate, but the tone in the House is not a good one. It’s not all one-sided.”
“It’s time for the people in this Chamber to get back to work,” Wolf says, addressing the General Assembly. “We are going to have to stop playing games with our fiscal future.”
“If you can’t agree to the budget reforms I have proposed, then help me find a sustainable alternative,” Wolf says. “But if you ignore that time bomb ticking, if you won’t take seriously your responsibility to the people of Pennsylvania, then find another job.”
By Nancy Hart