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May 30, 2014 | By | Posted in General News, Governor, Legislature

May bringing more bad budget news

By Andrew Staub | PA Independent

HARRISBURG, Pa. — The bad budget news just won’t stop in Pennsylvania.

State Sen. Jake Corman and state Rep. William Adolph, the Republican chairmen of the state House and Senate appropriations committees, said Thursday that Pennsylvania’s May revenue numbers will be as much as $100 million below expectations.

That harrowing news comes after revenue from April — one of the biggest collection months of the year — were short by $328.3 million. Adjusting for an early $80 million transfer from the state liquor store profits, a $100 million revenue shortfall in May would leave the state more than $600 million below expectations for the year.

The Independent Fiscal Office estimated earlier this month that 2013-14 revenue could end up $608 million below estimates. The hole could still deepen in June.

The shortfall has already thrown Gov. Tom Corbett’s budget proposal for next year off-kilter, Adolph said.

“It’s a very serious problem that we’re going to be working on,” said Adolph, R-Delaware, “and I’m open to all suggestions and looking to make sure that we get a balanced budget — a sustainable budget — done by June 30.”

 ROUGH ROAD AHEAD: Pennsylvania lawmakers will have some hard choices to make as revenues continue to fall below expectation.


ROUGH ROAD AHEAD: Pennsylvania lawmakers will have some hard choices to make as revenues continue to fall below expectation.

While the revenue problem has been crystallizing over the past several months, how the Legislature will deal with it specifically during its 18 scheduled session days in June has yet to become clear.

Budget basics, of course, mean lawmakers will have to entertain cuts, find new revenue or balance the budget with a mix of both.

Though the process just keeps getting “harder and harder,” Corman said the “first goal” is to develop a budget without new revenue. If lawmakers don’t support that, they could look at recurring or one-time revenues, said Corman, R-Centre.

“We’ll go through that process,” he said.

Adolph expects the strategy will become clearer after lawmakers are updated during a Tuesday caucus meeting. There’s still the possibility of boosting revenue and finding savings from proposals to privatize the state’s liquor stores and reform the pension system, he said.

Beyond that, lawmakers have about five pages worth of legislative proposals — from Republicans and Democrats alike — that could generate revenue, Adolph said.

There has already been plenty of chatter about increasing support for a severance tax on natural gas drilling, as well as discussion of allowing Internet gambling, to snare more funding.

And last week, Corbett signed an executive order that would allow more natural gas drilling in state parks and forests as long as it doesn’t disturb the surface, with hopes it nets $75 million next year.

That was part of the budget address that Corbett delivered Feb. 4, when he announced his $29.4 billion spending plan for 2014-15. His proposal increases the budget by 3.3 percent from the current fiscal year and includes $400 million in new education funding.

The dismal revenue could put that plan in jeopardy, though Adolph indicated there are lawmakers who would like to keep the education spending intact.

While Jay Pagni, Corbett’s press secretary, didn’t go into specifics about how the budget issue might be addressed, he said “all options should be explored and will be explored.”

“It may be necessary to make some difficult decisions, and we will work with the Legislature to craft the budget,” Pagni said.

It promises to be a busy run-up to the budget deadline. Adolph believes a budget bill needs to be introduced by the second week of June to finish on time.

With official May numbers set to dampen the process next week, lawmakers have a tough job ahead. It would mark the sixth straight month that revenues have come up shorter than anticipated.

“We have to go back to the drawing boards and take a look at our strategy after the May revenues,” Adolph said.

Staub can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.

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