Anticipating collision on state budget
During “regular” years, Pennsylvania lawmakers spend the month of June trying to scrape together enough money to produce a balanced state budget for the upcoming fiscal year that begins July 1 — or at least a budget that on the surface appears to be balanced, even if it really is not.
This year the challenge does not revolve around scraping together enough money to balance incoming revenue with the money that will be outgoing.
Instead, the important task lawmakers and the governor’s office face is to ensure that whatever new and surplus funds are available, as well as routine incoming funds, are spent properly.
Rather than “properly,” a better word probably is “sensibly,” since no one can be sure what the money situation in the commonwealth will be beyond the upcoming 2021-22 fiscal year, for which the state is blessed with $7.3 billion from the American Rescue Plan that President Joe Biden signed into law in March plus an anticipated $3 billion budget surplus.
Of concern needs to be whether any budget decisions of prior years still have “chisels” capable of chipping away at some of the good revenue news that is greeting 2021-22 fiscal preparations.
A front-page article in the June 8 Altoona Mirror reported that the state used nearly $4 billion in one-time cash — much of it federal coronavirus aid — to prop up the current 2020-21 spending plan.
The article went on to report that lawmakers might need to find cash to replace much of that $4 billion plus cover approximately $800 million in cost-overruns.
Meanwhile, there are the nasty words “structural deficit” that remain a factor in regard to any major decisions that the commonwealth pursues for 2021-22 and years beyond.
A major source of disagreement in this year’s state budget exercise is gearing up to be education.
Gov. Tom Wolf and Democratic allies in the House and Senate want more than $1 billion in new aid to public schools, which translates into about a 20 percent increase. General Assembly Republicans, meanwhile, are advancing a plan focusing more on charter and private schools.
What needs to be emphasized in the schools’ debate is that whatever additional money is allocated to school systems must be geared toward actually enhancing students’ learning, rather than being used for items that are questionable in that regard.
The June 8 article said Wolf’s goal is to “ensure Pennsylvania begins using its six-year-old school funding formula in a meaningful way for the first time, without cutting funding to districts that have benefited disproportionately in the past from state aid.”
An aide to the governor said Wolf believes now is the time to move ahead in what he labeled as “this historic priority.”
However, Republican lawmakers are focusing on a plan to take away from local school boards at least some of the power to approve charter schools, at the same time ramping up taxpayer financing of private schools through tax credits and vouchers.
The two radically different proposals are paving the way for interesting debate over the next couple of weeks. What is shaking out is an opportunity for compromise in a way that both sides can get some of what they want.
But there will be plenty of room for other compromise as well. The important question is whether having so much extra money this year will help spawn more budget-making give-and-take than what state residents have witnessed for a long time.