Pennsylvania: One Is the Loneliest Number

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And then there was one.  A full eleven weeks after the start of its fiscal year, Pennsylvania remains the only state in the union without a budget, as members of the legislative leadership and Governor Ed Rendell continue to negotiate the details of what is shaping up to be a roughly $28 billion spending plan.  (Yes, we know Michigan doesn’t have a budget either, but its fiscal year doesn’t start until next month.)

Still, given what is known about the latest iteration of the Legislature’s proposed FY 2010 budget, perhaps it is better that policymakers do not rush forward to enact it.  The Pennsylvania Budget and Policy Center (PBPC) has expressed concerns that the proposal “postpones Pennsylvania’s budget problems rather than solves them” because it relies on “overly optimistic revenue projections and one-time revenue sources.” These are concerns that Governor Rendell seems to share, at least in part. One example of the wishful thinking in the proposal is its reliance on gambling revenue, which has lately proved to be an unpredictable revenue source for many states. (See last week’s Digest article on gambling revenues.) Even worse, as other observers have noted, the proposed budget depends heavily on reductions in important public services, such as pre-kindergarten and after-school programs, as well as neo-natal care.

To be sure, Pennsylvania is not alone in facing serious budget problems.  However, unlike their counterparts in nearby New York, New Jersey, and Delaware, legislators in the Keystone State have refused to countenance an increase in broad-based taxes, such as the income tax increase put forward by Governor Rendell earlier in the year.  Little wonder, then, that they have to resort to spending cuts, questionable revenue estimates, and one-time sources of funding to try to bring the state’s books into balance.

For more on Pennsylvania’s fiscal crisis and on meaningful reforms the state could enact to generate additional revenue, visit PBPC’s informative web site.

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