Press Release: PBPC analysis of competing PA budget proposals

Marc Stier,

NEW – PBPC analysis of competing PA budget proposals

New analysis compares original Wolf proposal, compromise budget and House Republican budget – finds new revenue needed for all budget proposals

February 1, 2016 (Harrisburg, Pa.) –  In the context of Pennsylvania’s still-unfinished 2015-16 state budget, the Pennsylvania Budget and Policy Center (PBPC) today released a detailed analysis of three competing budget proposals put forward last year – the governor’s original 2015-16 proposal, the compromise budget, SB 1073, and the Republican bill, HB 1460, that passed both chambers and the governor blue-line vetoed in December.

Marc Stier, PBPC’s executive director and author of the analysis, said that the analysis reveals three key points. “We took a step back and crunched the numbers in each of these budgets, looked at the proposed spending in the context of general state spending over the last 20 years, evaluated how adequately each budget funds education and human services, and how each budget affects the structural budget deficit.

“Several things stand out,” continued Stier. “First, state government is not an insatiable black hole sucking in the rest of the economy. Overall spending is smaller relative to the size of the state economy than it was over the last 20 years. And today, state government employs 4,400 fewer people than it did in 2010. In fact, state government employment is up by only 402 workers since 1990 even as demand for government services has grown.

“Second, the bi-partisan budget, SB 1073, that passed the Senate and all but passed the House is a true compromise, splitting the difference in overall spending and in education and human services funding between the governor’s original proposal and the House Republican plan, which ultimately passed and was blue-lined by the governor.

“And third, the state’s substantial structural deficit—$318 million this year and $1.8 billion next year—can be laid at the feet of cuts in corporate taxes that started with Governor Ridge, continued with Governor Rendell and accelerated under Governor Corbett. If taxes on corporations provided the same share of state revenue today as they did in 2002, total general revenue would be $2.39 billion higher than projected this year.

“Our analysis reveals the stark differences among the three competing budgets that have led to this historic budget impasse,” concluded Stier. “The budget that the governor line-item vetoed in December will not carry the commonwealth through the rest of this fiscal year, and many schools will once again run out of money in March. If Pennsylvania is to have adequate and honest budgets, the legislature must provide new sources of general revenue, and that means raising taxes.”

Download the brief here