New Castle News


July 3, 2014

Our Opinion: Impractical spending plan leaves state hanging

NEW CASTLE — The fate of Pennsylvania’s budget for the new fiscal year remains uncertain.

But one thing is clear, the state Legislature has bungled its responsibilities once again.

Yes, lawmakers — or at least those in the Republican majority — rammed through a budget, loudly proclaiming it as a responsible plan with no tax increases.

In reality, it looks more like a work of fantasy.

Here’s a big problem: In the fiscal year that just ended, the budget had a $1.7 billion hole in it — mainly because tax revenues did not come in as anticipated. This occurred despite a recovering economy.

So what did the Legislature do? With no change in tax rates (and even cutting some business taxes) they approved a new spending plan that projects a 3.5 percent increase in revenue. What’s that based on? Wishful thinking.

Inflating revenue figures may be the oldest — and easiest — trick in the budget book. In an election year, the day of reckoning for this recklessness won’t come until after the November votes are counted.

The one bright spot in this budget nonsense is that Gov. Tom Corbett has refused to sign the package, noting it wasn’t the plan he wanted. In particular, Corbett is pushing for a reform of the state’s pension system as a way of controlling long-term costs. He also has demanded reform of liquor laws, although the specifics are unclear.

As of this writing, Corbett is leaving everyone hanging. He still can sign the budget, veto it or use his line-item veto powers to cut out portions of spending in an effort to get what he wants. But he appears to be holding on to the demand that the state’s pension system be changed as part of the overall budget process.

So far, lawmakers are balking at that. Corbett’s proposal is a so-called hybrid reform that treats new state employees differently. It’s designed to cut costs long term (even if the impact on the current budget is negligible) in a way that passes legal muster.

The plan appears to have little support among either Democrats or Republicans in the Legislature, so it remains unclear how all of this will play out.

Presumably Corbett — who is pushing the pension issue as crucial to the commonwealth’s future — can’t just back down. That means he either will veto the budget and force the Legislature to revisit the plan, or else cut out key programs lawmakers want to preserve.

And what happens then? We don’t know, but it should be interesting.

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