Feb 15, 2016

Newest State Budget Address Ignites War of Words

By Peter Calcara, Vice President - Government Relations

In front of a joint session of the Pennsylvania General Assembly, Gov. Tom Wolf announced on Feb. 9 his budget proposal for fiscal year 2016-2017. In strong, and sometimes scolding, terms, Wolf called on state lawmakers to both fix Pennsylvania’s structural budget deficit and invest more in schools. 

Harrisburg capitol building“There are two paths we can take: we can fix our deficit and invest in education to move Pennsylvania forward or we can continue to embrace the failed status quo and cut $1 billion from education funding, cut hundreds of millions of dollars to essential social services, and continue to stifle the commonwealth's economic growth,” Wolf said. “If we do not act to end the era of deficit denial, one time fixes, and budget gimmicks, the consequences will be billions of dollars in property tax hikes for Pennsylvanians and cuts to our schools and critical services for women, children, and seniors.” 

Wolf’s comments set off a firestorm of criticism from the opposition. And the war of words may only be just starting.

Senate Majority Leader Jake Corman (R-Centre) noted, “If the governor is genuinely trying to sell this budget proposal as ‘new’ he really should have delivered this address last Tuesday on Groundhog Day. This retread budget proposal offers superficial changes to his sizable tax-and-spend plan that has already been soundly opposed by taxpayers.”

Rep. Bill Adolph (R-Delaware), chair of the House Appropriations Committee, said, “Today we heard more campaign rhetoric and lecturing from the governor. The governor believes there are only two paths: 1) his higher taxes; or 2) a doom-and-gloom budget. But there is a middle path that balances the needs of Pennsylvanians, fixes our structural deficit, and is respectful to our taxpayers.”

Traditionally, governors use their budget address as an opportunity to outline their plans and vision for the fiscal year ahead. Even though that’s “traditionally” what happens, we all know residents of Pennsylvania are in unchartered waters when it comes to the state budget. In my nearly 30 years of working in Harrisburg, I cannot recall one budget overlapping another in such a significant and complicated way. In fact, there are really three budgets in play right now: the $30.8 billion “framework” budget the governor wants, House Bill 1460’s $30.3 billion budget approved by the Republican-controlled General Assembly, and Wolf’s new $32.7 billion spending plan for 2016-2017.

What happens next is beyond prediction. It has never happened, so it’s near impossible to handicap.

One thing is for certain, though. House and Senate appropriations committee hearings on the proposed $32.7 billion spending plan begin Feb. 22, and there will be fireworks.

The PICPA government relations team will be monitoring budget hearings. Follow us on twitter.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.
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