Pennsylvania among few states to struggle with budget deficit
HARRISBURG — With eight days remaining to close a budget deficit of at least $1.4 billion, lawmakers and Gov. Tom Corbett are seeking a solution that could include a tax increase.
State tax collections are down $532 million, or 2 percent below estimate, as lawmakers try to close the deficit and approve a budget by the June 30 deadline.
Most other states, however, report sufficient revenue in a spring survey by the National Association of State Budget Officers, released this month.
Twenty-six states had higher than anticipated revenue, and 13 states were on target with estimates. Eleven states, including Pennsylvania, reported tax collections lower than estimates.
Budget Secretary Charles Zogby has opened the door to a possible tax increase — even a gas severance tax, which Corbett has opposed for years.
But Corbett has said the Legislature first must address “cost-drivers,” such as a state pension system with a $50 billion unfunded liability.
The House on Monday may begin voting on a pension reform bill and an undisclosed spending plan, said Stephen Miskin, a spokesman for Republican leaders.
Corbett, 65, a Shaler Republican, faces a tough re-election prospect in November against Democrat Tom Wolf, 65, a York County businessman.
In 2010, Corbett ran as a fiscal steward opposed to tax increases. He entered office facing what he said was a $4.2 billion deficit; he slashed spending and balanced the budget.
Though he's working with a Republican-controlled Senate and House, “It's a real dilemma he faces. His options are limited,” said Moe Coleman, director emeritus of the Institute of Politics at the University of Pittsburgh.
Pennsylvania's shortfall could hit $1.7 billion, said Rep. Joe Markosek of Monroeville, ranking Democrat on the House Appropriations Committee. After cuts from 2011, “The state is really in pretty bad shape, particularly in education” funding, Markosek said.
Corbett's proposed budget includes a tentative $306 million increase for public schools.
Asked why Pennsylvania confronts a deficit, Corbett's press secretary, Jay Pagni, attributed it to “a combination of lower-than-anticipated revenue and costs that are a direct result of changes at the federal level, resulting in reduced reimbursements.”
Factors include changes in federal tax law and demands of implementing the Affordable Care Act, Pagni said. He cited pension obligations and increased costs for Medicaid.
The level of impact from a change in federal tax law was “totally unforeseen,” Pagni said.
Official estimates for 2013-14 “took into account the fact that the 2013 federal income tax increase on capital gains and dividends would cause some taxpayers to shift income into 2012, but the magnitude of that tax shift was a surprise,” said Elizabeth Brassell, a Department of Revenue spokeswoman. That hurt the state's personal income tax collection.
Todd Haggerty, a policy analyst for the National Conference of State Legislatures, said recovery from the economic downturn since 2008 has been slower than recoveries from previous slumps in the market.
“The trough of the Great Recession was so deep that the climb out of it has been very difficult and gradual,” Haggerty said.
Still, Rep. Dwight Evans, D-Philadelphia, questions how other states are able to meet expectations and Pennsylvania cannot.
“It's poor leadership. I don't say that lightly,” said Evans, who was former Gov. Ed Rendell's go-to guy in the House on state tax issues.
Charlie Gerow, a Harrisburg-based Republican consultant whose firm has a contract with the Corbett campaign, points to Corbett's predecessor: “The governor inherited a fiscal mess that few other governors have had to deal with. We had to get back to solvency and responsibility. We're still cleaning up the mess Ed Rendell left us with.”
Tagging Rendell, a Democrat, with the problem is misplacing blame, said Chuck Ardo, Rendell's former press secretary. “It was a mess nationally,” Ardo said. “Every state in the union was facing serious challenges.”
Corbett's campaign spokesman Billy Pittman said Corbett has reduced the size of state government, reduced state spending and saved taxpayers “more than a half-billion dollars in government innovation and efficiencies.”
Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or firstname.lastname@example.org. Gideon Bradshaw, an intern with the Pennsylvania Legislative Correspondents Association, contributed.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- EPA says it won’t reguluate coal ash as hazardous waste
- Pitt’s acting athletic director is deft facilitator
- Steelers notebook: Polamalu, Taylor unlikely to play, Harrison ‘ready’
- Shady Side Academy torments Apollo-Ridge, moves to 3-0
- A-K Valley roundup: Late surge lifts Knoch past Valley
- DC local roundup: Connellsville boys basketball earns first win of the season
- Hotel building boom sweeps Pittsburgh region
- Real estate union: Howard Hanna buys Langholz Wilson Ellis
- Washington County man dies following fire at apartment complex
- Penn Township man who shot friend gets probation
- Michigan State defensive coordinator a Pitt coaching candidate