New Castle News
NEW CASTLE —
Harrisburg missed its budget deadline this year by almost a week.
But compared to the last time around, when the spending plan was 100 days late, the current effort was Olympian in comparison.
One may wonder how — in an election year — lawmakers and Gov. Ed Rendell were able to resolve political differences and come up with a timely budget. Part of the explanation is that politicians knew the public wouldn’t tolerate a repeat performance of 2009, when crucial state funding dried up for many programs and state employees faced layoffs.
There is, however, one other factor to credit for this year’s budget. Put simply, the politicians cheated.
It’s a common fiscal trick practiced at all levels of government when money is tight. Officials engage in some imaginative numbers crunching, and they also practice the economic equivalent of wishful thinking.
For instance, one of the last-minute sticking points involved the creation of an Independent Fiscal Office. Republicans who support this new agency tout it as the Harrisburg equivalent of the Congressional Budget Office, generally respected for its clear-eyed assessment of Washington’s finances.
Supposedly, a state version of the CBO will establish some badly needed fiscal discipline and efficiency. And as we all know deficits and political budget squabbles are unheard of in Washington.
Anyway, the final language in the budget did nothing except articulate legislative “intent” to establish this new office in the fall. Between now and then, lawmakers of both parties and Rendell will supposedly hammer out a deal on its powers and responsibilities.
All of this with the November election looming.
And that’s not the only aspect of the budget that awaits further action. Similar intent was expressed to pass a new severance tax for companies drilling for natural gas in the Marcellus Shale.
This huge reserve of gas is seen as a significant source of revenue for property owners and gas companies. And some lawmakers want the government to get its share of the wealth.
But there are worries about the dangers of these deep wells to water supplies and the overall environment. A severance tax would cover the costs of any such harm.
There are other aspects of state finances that remain in limbo or are depending on the arrival of what may be dubbed “maybe money.” Despite holding a special session on transportation, the Legislature produced no results on a plan to address deteriorating roads and bridges in the commonwealth.
And while the House passed a pension reform plan (which delays more pain than it deals with) the Senate failed to act.
Meanwhile, the budget — as devised — is counting on a continued influx of federal stimulus funds. There’s no guarantee that program will continue. And Pennsylvania is still awaiting $850 million in Medicaid money from Washington.
From a practical standpoint, this budget won’t make ends meet. And it sets the stage for serious fiscal problems in 2011, when a new governor will be in office. We predict it won’t be pretty.
