State gov­ern­ment fac­ing more pro­jected deficits

Daily Local News (West Chester, PA) - - NEWS -

HAR­RIS­BURG >> Penn­syl­va­nia state gov­ern­ment re­ceived sober­ing fis­cal news on Tues­day as the Leg­is­la­ture’s in­de­pen­dent bud­get an­a­lyst pro­jected more big deficits in the com­ing years, in­clud­ing a short­fall this year.

The In­de­pen­dent Fis­cal Of­fice’s di­rec­tor, Matthew Knit­tel, said a pack­age of more than $1 bil­lion — in­clud­ing a cig­a­rette tax in­crease — ap­proved in July to bail out the cur­rent year’s deficit had made lim­ited progress in chip­ping away at the state gov­ern­ment’s longterm deficit.

The Repub­li­can-con­trolled Leg­is­la­ture has re­jected Demo­cratic Gov. Tom Wolf’s ef­forts dur­ing the last two years to fill a stub­born deficit with a multi­bil­lion­dol­lar tax in­crease.

An­other fight is likely next year, as bud­get­mak­ers con­front what the In­de­pen­dent Fis­cal Of­fice pro­jected to be a $1.7 bil­lion in the 2017-18 fis­cal year, which starts July 1. The deficit is ex­pected to con­tinue grow­ing ev­ery year af­ter that, ac­cord­ing to the of­fice.

Wolf’s spokesman Mark Ni­cas­tre said in a state­ment Tues­day: “The gov­er­nor has been work­ing with the leg­is­la­ture to ad­dress the struc­tural deficit, and it is even more clear now that we can­not kick the can down the road.”

Wolf, he said, “has re­mained stead­fast in his be­lief that Har­ris­burg has to make the dif­fi­cult de­ci­sions to put its fis­cal house in or­der.”

The In­de­pen­dent Fis­cal Of­fice also pro­jected a short­fall of more than $500 mil­lion in the state’s cur­rent $31 bil­lion bud­get. Tax col­lec­tions through Oc­to­ber were run­ning be­hind ex­pec­ta­tions, and even be­hind col­lec­tions through the same point last year.

In ad­di­tion, the state may need to scrounge hun­dreds of mil­lions of dol­lars more be­cause this year’s bud­get funded state pris­ons and Med­i­caid pro­grams at more than $300 mil­lion be­low what the Wolf ad­min­is­tra­tion had rec­om­mended would be nec­es­sary to cover costs.

In the fu­ture, av­er­age costs will rise by a per­cent­age point per year faster than tax col­lec­tions over the next five years, the of­fice said.

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