IFO Says General Fund Surplus Likely to be Depleted by Next Year
General Fund surplus becomes $1.57M deficit in 2025-26
July 18, 2024
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General Fund surplus becomes $1.57M deficit in 2025-26
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In what some describe as no surprise, the Independent Fiscal Office (IFO) today published a five-year projection of Pennsylvania’s General Fund revenues and expenditures and found that the fund’s surplus will likely disappear next year.
Last November, the IFO projected operating deficits of $624 million in fiscal year (FY) 2023-24, $2.0 billion in FY25, and $3.0 billion in FY26.
Those projections were updated in today’s report based on the FY25 budget that was adopted and signed into law last week.
The FY24 deficit added $268 million to $892M, while the FY25 deficit ballooned to $3.3 billion. And the topper was the FY26 deficit which is now projected to reach $4.5 billion.
Finally, a General Fund surplus of $6.63 million will drop to $2.96M in the upcoming year and turn to a $1.57M deficit in FY26.
“The IFO report should not come as a surprise to anyone,” House Appropriations Chairman Seth Grove (R-York) said. “The IFO and House Republicans have been warning the public for years Pennsylvania has a structural deficit. The unsustainable spending in the current year budget is why most House Republicans opposed SB 1001 as amended, this report just confirms our worst fears were right.”
A structural deficit means that the state’s annual costs, such as paying public servants and providing health care to people who can’t afford it, consistently exceed the state’s annual tax revenue.
The IFO expects net revenues to be $43.5 billion, but spending to be $45 billion. By 2025-26, revenues are estimated to be $44.7 billion – and $49.5 billion of expenditures.
Unlike the federal government, Pennsylvania cannot go into debt to cover its annual operating expenses. The state constitution prohibits the commonwealth from taking on debt except in a few specific scenarios, such as for disaster relief.
The state’s Rainy Day Fund, which came into play during budget negotiations, is projected to rise from nearly $7 million this year to $7.7 million in FY 26.
In what some describe as no surprise, the Independent Fiscal Office (IFO) today published a five-year projection of Pennsylvania’s General Fund revenues and expenditures and found that the fund’s surplus will likely disappear next year.
Last November, the IFO projected operating deficits of $624 million in fiscal year (FY) 2023-24, $2.0 billion in FY25, and $3.0 billion in FY26.
Those projections were updated in today’s report based on the FY25 budget that was adopted and signed into law last week.
The FY24 deficit added $268 million to $892M, while the FY25 deficit ballooned to $3.3 billion. And the topper was the FY26 deficit which is now projected to reach $4.5 billion.
Finally, a General Fund surplus of $6.63 million will drop to $2.96M in the upcoming year and turn to a $1.57M deficit in FY26.
“The IFO report should not come as a surprise to anyone,” House Appropriations Chairman Seth Grove (R-York) said. “The IFO and House Republicans have been warning the public for years Pennsylvania has a structural deficit. The unsustainable spending in the current year budget is why most House Republicans opposed SB 1001 as amended, this report just confirms our worst fears were right.”
A structural deficit means that the state’s annual costs, such as paying public servants and providing health care to people who can’t afford it, consistently exceed the state’s annual tax revenue.
The IFO expects net revenues to be $43.5 billion, but spending to be $45 billion. By 2025-26, revenues are estimated to be $44.7 billion – and $49.5 billion of expenditures.
Unlike the federal government, Pennsylvania cannot go into debt to cover its annual operating expenses. The state constitution prohibits the commonwealth from taking on debt except in a few specific scenarios, such as for disaster relief.
The state’s Rainy Day Fund, which came into play during budget negotiations, is projected to rise from nearly $7 million this year to $7.7 million in FY 26.
In what some describe as no surprise, the Independent Fiscal Office (IFO) today published a five-year projection of Pennsylvania’s General Fund revenues and expenditures and found that the fund’s surplus will likely disappear next year.
Last November, the IFO projected operating deficits of $624 million in fiscal year (FY) 2023-24, $2.0 billion in FY25, and $3.0 billion in FY26.
Those projections were updated in today’s report based on the FY25 budget that was adopted and signed into law last week.
The FY24 deficit added $268 million to $892M, while the FY25 deficit ballooned to $3.3 billion. And the topper was the FY26 deficit which is now projected to reach $4.5 billion.
Finally, a General Fund surplus of $6.63 million will drop to $2.96M in the upcoming year and turn to a $1.57M deficit in FY26.
“The IFO report should not come as a surprise to anyone,” House Appropriations Chairman Seth Grove (R-York) said. “The IFO and House Republicans have been warning the public for years Pennsylvania has a structural deficit. The unsustainable spending in the current year budget is why most House Republicans opposed SB 1001 as amended, this report just confirms our worst fears were right.”
A structural deficit means that the state’s annual costs, such as paying public servants and providing health care to people who can’t afford it, consistently exceed the state’s annual tax revenue.
The IFO expects net revenues to be $43.5 billion, but spending to be $45 billion. By 2025-26, revenues are estimated to be $44.7 billion – and $49.5 billion of expenditures.
Unlike the federal government, Pennsylvania cannot go into debt to cover its annual operating expenses. The state constitution prohibits the commonwealth from taking on debt except in a few specific scenarios, such as for disaster relief.
The state’s Rainy Day Fund, which came into play during budget negotiations, is projected to rise from nearly $7 million this year to $7.7 million in FY 26.
In what some describe as no surprise, the Independent Fiscal Office (IFO) today published a five-year projection of Pennsylvania’s General Fund revenues and expenditures and found that the fund’s surplus will likely disappear next year.
Last November, the IFO projected operating deficits of $624 million in fiscal year (FY) 2023-24, $2.0 billion in FY25, and $3.0 billion in FY26.
Those projections were updated in today’s report based on the FY25 budget that was adopted and signed into law last week.
The FY24 deficit added $268 million to $892M, while the FY25 deficit ballooned to $3.3 billion. And the topper was the FY26 deficit which is now projected to reach $4.5 billion.
Finally, a General Fund surplus of $6.63 million will drop to $2.96M in the upcoming year and turn to a $1.57M deficit in FY26.
“The IFO report should not come as a surprise to anyone,” House Appropriations Chairman Seth Grove (R-York) said. “The IFO and House Republicans have been warning the public for years Pennsylvania has a structural deficit. The unsustainable spending in the current year budget is why most House Republicans opposed SB 1001 as amended, this report just confirms our worst fears were right.”
A structural deficit means that the state’s annual costs, such as paying public servants and providing health care to people who can’t afford it, consistently exceed the state’s annual tax revenue.
The IFO expects net revenues to be $43.5 billion, but spending to be $45 billion. By 2025-26, revenues are estimated to be $44.7 billion – and $49.5 billion of expenditures.
Unlike the federal government, Pennsylvania cannot go into debt to cover its annual operating expenses. The state constitution prohibits the commonwealth from taking on debt except in a few specific scenarios, such as for disaster relief.
The state’s Rainy Day Fund, which came into play during budget negotiations, is projected to rise from nearly $7 million this year to $7.7 million in FY 26.
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