BLOG: Gov. Wolf is Bringing Back Honest Budgeting to the Commonwealth

By: Mark Nicastre, Communications Director

February 29, 2016

After years of kicking the can down the road, it’s time to finally face Pennsylvania’s fiscal reality.

To avoid making tough choices, the 2014-15 budget relied on over $2 billion in one-time and unsustainable sources. In June, House Bill 1192, which significantly underfunded commonwealth operations, even relied on $1.5 billion in one-time and unsustainable sources to balance.

If you account for all of the one time fixes that we now must pay due to years of Republican inaction, the increase in the 2016-2017 budget comes in at only 3.5% – well below the national average of state budget increases.

Check out all the one time fixes that we must account for:

The 2014-15 budget relied on over $2 billion in one-time and unsustainable sources.
  • One-time Revenues: including
    • Extraordinary Lapses $417.0
    • Escheats $389.0
  • Raiding Special Funds: totaling $648 million
  • One-time Cost Shifts: including
    • One Month of Payments to Managed Care Organizations Shifted to 2015-16 $394.0
House Bill 1192 again relied on $1.5 billion in one-time and unsustainable sources to balance their budget in June.
  • One-Time Revenues: totaling $520 million including
    • Budget Surplus Carried Over from 2014-15 $300.0
    • Liquor System Revenue $220.0
  • One-Time Cost Shifts: totaling $563.6 million
  • Questionable Savings: totaling $424.0 million including
    • Ignores FY 2015-16 Costs and Revenue Adjustments $237.0
    • Fails to Fund Managed Care Program $187.0

If we do not deal with all of these costs that have built up over the years, both education and human services, who are both already struggling after years of skeleton budgets, will face billions in cuts.

Doubling down on cuts to education will again lead to 23,000 educator layoffs, ballooning class sizes, and cuts to important programs. In addition, property taxes will skyrocket as school districts will be forced to fund their schools with local revenue as a result of a lack of state investment.

These one-time and unsustainable sources also hurt our credit rating, which just leads to higher borrowing costs, further crowding out other areas. The credit rating agencies could not be clearer – we have to stop this gimmicky budgeting or we are going to end up in junk bond status.

As Governor Wolf said during his budget speech:

“I didn’t run for this office to be party to the corner-cutting and budget gimmickry that got us into this mess. We can’t afford to play political games while this crisis is casting a dark shadow on our future. There is simply too much at stake.”

There is time to right our wrongs, straighten our path, and give Pennsylvania the future it deserves. But we must take the fiscal mess facing our commonwealth at face value. It’s time for the legislature to take our financial future seriously and take an honest look at the math.

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