Legislators call for 'surplus' to be applied to education, 'critical' programs
By Darwyyn Deyo | PA Independent
HARRISBURG — Pennsylvania has more money in the bank than it thought — and House Democrats are ready to spend it.
The Pennsylvania Department of Revenue reported the state’s tax revenue surplus for the year is now $540 million, up from the $506 million previously reported. The news is leading the House Democrats to call for increased spending in the upcoming state budget.
State revenue collections for May were $33.8 million, or 2 percent, more than estimated, bringing the working budget surplus for 2010-11 to almost $540 million.
“With only one month to go in the fiscal year, the governor and many House Republicans would rather stick their heads in the sand than acknowledge the fiscal reality that’s as clear as the nose on my face,” said House Minority Leader Frank Dermody, D-Allegheny.
Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said the revenue overestimate does not equal a surplus and should not be treated as such.
"As of now, there is no surplus,” said Miskin. “You’re facing hundreds of billions of dollars in liabilities. What do you do with the revenue overestimate? That’s obviously a question that needs to be determined, but increasing budget spending may not be the best answer.”
The House passed its version of the state budget on May 24 with a 109-92 vote.
Among Pennsylvania’s obligations include nearly $3.8 billion in unemployment compensation debt owed to the federal Department of Labor and an unfunded liability to the state’s two pension funds. By 2028, state taxpayers will be forced to contribute $37.5 million to the Public School Employees’ Retirement Fund and $1.97 million to the State Employees Retirement Fund, contributions which increase annually.
House Republican leaders have argued that the extra revenue cannot be counted on next year, and spending the money now will hurt the budget down the road.
“It’s that spend, spend, spend mentality that got us into trouble in three years of deficit budgets," Miskin said. "Had we been a little more prudent you wouldn’t be facing these drastic cuts this year.”
Dermody expressed the opposite view in a news release Wednesday, arguing that this year's “unexpected” revenue becomes next year's “expected” revenue. He speculated that Pennsylvania lawmakers could “conservatively” count on $1.1 billion in “unplanned additional revenue for the current year and next year combined.”
Senate Republicans, however, have been more critical of the education spending cuts in the House legislative budget, and state Sen. Dominic Pileggi, R-Chester, the Senate majority leader, embraced the spending potential in the new revenue figures.
The House budget proposes spending $10.19 billion on education, compared to the $10.77 billion the state spent for fiscal year 2010-11.
“The solid revenue collections seen in May, which followed strong collections in April, support our position that a portion of the now $540 million revenue surplus can be used in a fiscally responsible way to provide additional support for critical programs,” Pileggi said.
Pileggi said Senate Republicans would work with the state House and Gov. Tom Corbett to craft a budget reflecting the current revenue.
Lisa Scullin, spokesperson for state Sen. Jay Costa, D-Allegheny, the Senate minority leader, called the new surplus figures “very good news.”
“There could be a portion of it that could be used to soften the very harsh cuts that are proposed,” said Scullin. “We’re not advocating (using) it in its entirety, but it might be wise to put a portion of it away to save for a rainy day and use another portion of it to fund some of those programs that are critical.”
