HARRISBURG, Pa. (WHTM) — Just a few months after Pennsylvania’s budget was completed, talks are heating up about the next budget, which, as usual, doesn’t immediately have everyone’s favor.
Gov. Josh Shapiro (D) will give his fourth budget address Tuesday. Last year, in February, talks were beginning about the budget, which was not finalized in November despite being due June 30.
The current year’s budget did not touch the rainy day fund, which is at about $7.5 billion right now, but in its recent report the Independent Fiscal Office suggests that its current spending revenue levels project the upcoming budget to dip into the rainy day fund for $5 billion, so there are real fiscal warning signs this year.
Shapiro expected to address housing costs, energy demand, and unfinished business in budget pitch
“This has been building up a long time, so before COVID, we had a structural deficit of about $1 billion,” director of the Independent Fiscal Office Matthew Knittel said. “Roughly every year, it’s increased by about a billion. Healthcare is a big driver of that; a lot of those costs are mandatory.”
Although Knittel says there are good economic signs like sales and income taxes are ahead of their projections, meaning the state is taking in more than it had anticipated.
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Now again, the Governor’s budget address is just a “wish list.” It has to be fought over, mostly with Senate Republicans because the House is mostly controlled by Democrats.
A battle over the rainy day fund seems to be brewing, as Republicans will not want to touch $5 billion of the $7.5 billion, considering they did not want to touch any of it this year, which was be the big line in the sand.
The way to fix a revenue problem is by either generating more of it, and will they do that with recreational marijuana and skill games. Or you cut spending.
This is also an election year, meaning that lawmakers probably don’t want the people voting in early November at the same time the budget is being finalized.
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