State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Top stories of 2017: Another year of budget woes

Written by Katie Meyer, Capitol Bureau Chief | Dec 28, 2017 5:45 PM
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Lawmakers worked four months past their deadline to to get a revenue plan passed--though negotiations repeatedly collapsed and prompted extended breaks. Often, sessions lasted late into the night. (Photo by AP)

 

(Harrisburg) -- Pennsylvania has struggled for a decade to pass balanced state budgets, and this year was no exception.

A funding plan finally made it to Governor Tom Wolf's desk four months after it was due, though like all his previous budgets, Wolf let it become law without a signature.

Many fiscal watchdogs say it doesn't do much to address the commonwealth's underlying issues anyway.

Off the bat, lawmakers were at a disadvantage when creating it.

Revenue had come in more than a billion dollars less than expected the year before, and all told, they were on the hook to fill a $2.2 billion hole.

A $32 billion spending plan passed just after the June 30th deadline with relatively little trouble. But when it came time to fund it, there was a stark partisan divide. 

Democrats called for new taxes on the natural gas drilling industry. Republicans wanted gaming or liquor industry expansions, or spending freezes.

 

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Wolf rarely held press conferences on budget negotiations. That led reporters to track him down at unrelated events in an attempt to get information--for instance, one at an animal shelter. (Photo by Katie Meyer/WITF)

Negotiations crashed several times. At one point, Governor Tom Wolf disparaged House Republicans--who held out against taxes--and vowed to balance the budget himself, by borrowing money against the state's liquor industry.

"They'd rather see me fail than Pennsylvania succeed," Wolf said. "They'd rather protect special interests, they'd rather protect lobbyists and campaign donors than do the right thing. I'm not going to play their games anymore, so I'm drawing a line in the sand."

Wolf vowed to "manage" the commonwealth's finances "until the House sees fit to do what it's supposed to do."

House Spokesman Steve Miskin responded, saying Wolf was the one who let the fiscal situation get out of hand in the first place.

"It's three years into his administration," Miskin said. "That's what the job of governor is. Manage."

In the midst of the standoff, S&P Global Ratings downgraded Pennsylvania's credit, putting it among the bottom five nationwide. 

According to analyst Carol Spain, that's because Pennsylvania's financial plans have relied on shaky revenues for too long.

"We've seen a pattern of adopting structurally imbalanced budgets," she said.

When a budget did eventually pass, it borrowed $1.5 billion, expanded gambling, and moved some state funds around.

 

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Indiana County's Dave Reed helms the House Republican caucus. He had considerable trouble getting his members to sign on to plans that House Democrats, the Senate, and the governor supported. (Photo by AP)

House Republican Leader Dave Reed acknowledged, no one was fully happy with it.

"Look, in an ideal world, you do a little bit less borrowing, you do a little bit more in recurring revenue," he said. "But there weren't enough votes on both sides of the aisle to do that, so you've got to go to the next plan."

Much of the new funding can't be counted on next year

The state's Independent Fiscal Office said lawmakers will likely have to deal with a $1 billion imbalance going into next year's budget--though the Wolf administration contests that projection.

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