PA-BGT: Wolf Warns of Structural Deficits (VIDEO)
Gov. Tom Wolf returned to his role as head mathematician in Harrisburg on Monday as he highlighted the perils of Republican budget plans.
PA will need broad tax increases to fend off a structural deficit that could grow to almost $2.3 billion in the next two years, Wolf said while breaking down the numbers for capital reporters.
“I am not trying to do anything other than show you what I believe to be the truth in terms of the mathematics of this budget,” Wolf said.
The state needs to find a way to fund over $31 billion in spending mandated by previous budgets and current spending plans, Wolf said, or PA will have to start cutting programs and increasing property taxes, while leaving itself vulnerable to more credit downgrades. And that $31 billion is “before Tom Wolf puts anything in for education” or other programs, he said.
The GOP-proposed budget Wolf vetoed in June was estimated at $29.75 billion by the PA Independent Fiscal Office, leaving the state with a $1.28 billion structural deficit in 2015-16, Wolf said. Unless leaders can agree on a comprehensive budget, Wolf expects the structural deficit to grow to by another billion dollars in 2016-17.
Though the 2014-15 fiscal year ended $274 million in the black, its “smoke-and-mirrors” budget relied on over $2 billion in one-time, unsustainable sources, the businessman-turned-Governor explained. These included revenue shifts and delaying payment on services and building projects until the next fiscal year.
GOP leaders will have to come up with $1.5 billion in these “one-time fixes” to balance the 2015-16 budget, only further kicking the can down the road.
Wolf will submit his own revenue plans to the PA House of Representatives on Wednesday – the 98th day of the impasse – and PA GOP leaders look to have re-energized the rookie Governor with a promise of a final vote.
“I’m looking forward to trying to get 102 votes [in the House],” Wolf said. “This is a once-in-a-generation vote. I’m grateful for the opportunity to test it.”
If all 84 Democrats side with Wolf, he will need to swing 18 GOP legislators, though Wolf acknowledged his tax plans face a challenge in his own party too, according to Brad Bumsted of the Tribune Review.
Still, Wolf seems confident and excited to see his plans put to a vote.
“If we don’t figure out how to make the uncomfortable choice of having revenues that are real, of being honest in our budget, we’re going to have – next year – to come up with somewhere between $2.5 and $3 billion worth of cuts,” Wolf said. “If people didn’t like what they saw four, five years ago, they’re going to hate next year because we simply have come to the end of the line using these one-time fixes.”