State Budget Update

 

Pennsylvania’s unprecedented nine-month state budget crisis ended on March 23rd when Democratic Governor Tom Wolf announced he would not veto a Republican bill that contained the remaining $7 billion of the 2015-2016 budget.  In a rare move, the Governor chose not to actually sign the latest budget bill, but allowed it to become law without his signature.  The Governor said he simply could not sign a budget that fell far short on his education funding goals, among other things.

The final piece of Pennsylvania’s budget was sent to the Governor in mid-March by the General Assembly.  There was enormous pressure on Wolf to not veto the bill, a move that would have once again caused schools to consider shutting their doors or borrowing more money before summer break.  While school funding was at the center of the final supplemental budget bill, the fact that several Democrats joined Republicans in advancing the budget revealed a weakness for the Governor in his own party, and Republican legislative leaders had openly discussed rounding up Democratic votes to override a veto if one occurred.

So who won the budget battle of 2015-2016?  A case can easily be made that Republicans came out on top.  After repeatedly saying taxpayers could not afford the spending and tax increases proposed by Wolf in his first budget proposal, Republicans contained state spending to just over $30 billion in the final budget, boosted education funding by $200 million and stopped the Governor’s tax increases.  At the end of the day, the GOP can take credit for a no-tax-increase budget that increased funding for schools.

Where does all of this leave Pennsylvania in terms of the 2016-2017 budget that is required to be in place by June 30th?  Well, the answer is “in yet another big mess.”  The partisan gridlock fueled by deep philosophical divisions over taxes and spending that dominated the first fifteen months of Governor Wolf’s term continues. 

In February, when Governor Wolf called for a 2016-2017 budget totaling $30.8 billion with $2.7 billion in tax increases, including an 11 percent income tax increase retroactive to January, Republican leaders immediately expressed opposition.  With the current year’s budget finally wrapped up after months of intense negotiations and public relations wars on taxes, spending and school funding, Harrisburg observers see another major budget battle looming.  This is especially true because 2016 is an important election year, with state House and Senate candidates hoping to win votes based on support for or opposition to various budget proposals.

The table has been set for the budget crisis to repeat itself, a reminder of William Shakespeare’s keen observation in The Tempest that “what’s past is prologue.”

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