Pa. bud­get plan is not nor­mal, or good gov­ern­ment

Daily Times (Primos, PA) - - OPINION - By Marc Stier Times Guest Colum­nist Marc Stier is the di­rec­tor of the Penn­syl­va­nia Bud­get and Pol­icy Cen­ter.

et’s cut to the chase: the process that led to a com­pleted state bud­get is not nor­mal. And good gov­ern­ment in this state is im­pos­si­ble if it be­comes nor­mal.

The bud­get is tech­ni­cally in bal­ance. But de­spite in­clud­ing about $1.5 bil­lion in ef­fi­cien­cies iden­ti­fied by Gov. Tom Wolf, it raises so lit­tle new rev­enue that it does too lit­tle to close a struc­tural im­bal­ance be­tween spend­ing and rev­enues. The next fis­cal year will be­gin with a deficit of at least $1 bil­lion.

This re­sult is en­tirely the fault of the ex­trem­ists who lead the Repub­li­cans in the House of Rep­re­sen­ta­tives. They have con­sis­tently re­jected bi­par­ti­san com­pro­mises em­braced by Gov. Wolf, Democrats and their fel­low Repub­li­cans in the Gen­eral Assem­bly.

We live at a time when the prin­ci­ples, ideals and prac­tices that have gov­erned Amer­i­can pol­i­tics for gen­er­a­tions are be­ing chal­lenged at ev­ery turn. The prin­ci­ple that of­fice hold­ers should ad­here to com­mon stan­dards of ev­i­dence and ar­gu­ment is called into ques­tion by politi­cians who lie repet­i­tively and shame­lessly. The ideal of a com­mon good greater than party vic­tory is re­jected by politi­cians for whom the only mea­sure of suc­cess is de­feat­ing the other side. And the prac­tice of em­brac­ing com­pro­mise when nei­ther side can rule on its own is over­turned by politi­cians who would rather see dis­as­ter be­fall us all than con­cede point.

We see the un­for­tu­nate re­sults of these trends ev­ery day in the fed­eral gov­ern­ment. And it is im­pos­si­ble to look at the process by which the state bud­get was com­pleted this year with­out see­ing the same thing.

At that start of our cur­rent fis­cal year on July 1, Penn­syl­va­nia faced a deficit of al­most $3.5 bil­lion. That in­cluded a $1.5 bil­lion deficit run up in the last fis­cal year largely due to de­clin­ing state rev­enues. The rest was the cur­rent year deficit.

Po­lit­i­cal lead­ers who obeyed the old rules would have rec­og­nized their con­sti­tu­tional re­spon­si­bil­ity to bal­ance the bud­get, the po­lit­i­cal ne­ces­sity of main­tain­ing ser­vices the vot­ers want, and the im­pos­si­bil­ity of either side se­cur­ing all its goals in di­vided gov­ern­ment. And they would have then em­braced a com­pro­mise be­tween Demo­cratic tax in­creases and Repub­li­can spend­ing cuts.

For a mo­ment, such a com­pro­mise seemed pos­si­ble. The gov­er­nor pro­posed on an ide­o­log­i­cal clos­ing one-third of the deficit with busi­ness tax in­creases and two-thirds of it with deep cuts in spend­ing from ef­fi­cien­cies in the de­liv­ery of state ser­vices. The gov­er­nor’s spend­ing pro­posal was so aus­tere that Repub­li­cans found few rea­sons to com­plain.

The House and Se­nate agreed to a spend­ing plan the gov­er­nor al­lowed to be­come law. And then Democrats and Repub­li­cans in the Se­nate passed a bi­par­ti­san fund­ing plan. It raised $1.5 bil­lion by float­ing bonds to be re­paid by tobacco set­tle­ment rev­enues. This was not an ideal pro­posal. But given po­lit­i­cal re­al­ity and the partly un­ex­pected na­ture of the 20162017 deficit, bor­row­ing this amount could be jus­ti­fied by the agree­ment of the Se­nate to raise $571 mil­lion in re­cur­ring rev­enue to set the state on a path to close pro­jected fu­ture deficits.

The bi­par­ti­san agree­ment was not per­fect. Too much of the new rev­enue was gen­er­ated from gross re­ceipts taxes that fall heav­ily on those with low in­comes and too-mod­est sev­er­ance tax on nat­u­ral gas drilling in­cluded prob­lem­atic en­vi­ron­men­tal pro­vi­sions. But it was a bi­par­ti­san agree­ment nonethe­less.

Democrats in the House em­braced com­pro­mise, too. But House Repub­li­cans, led by Speaker Mike Turzai and Ma­jor­ity Leader Dave Reed, did not. They con­tin­u­ally said no to needed re­cur­ring rev­enue, ul­ti­mately ac­cept­ing only $60 mil­lion of those rev­enues even though a bi­par­ti­san ma­jor­ity of leg­is­la­tors in the House ap­pear to sup­port a sev­er­ance tax. In­stead, they pro­posed to close the deficit with more of the oneyear rev­enues that do not close the deficit long-term. And they em­braced a new source of one-shot rev­enues – raids on sur­pluses in the spe­cial funds set aside for spe­cific pur­poses. Yet those who know how these spe­cial funds work no more be­lieve in the ex­is­tence of large, un­com­mit­ted sur­pluses than they be­lieve in uni­corns.

They de­fended their pro­pos­als by claim­ing that state spend­ing was grow­ing faster than the econ­omy, even though IFO num­bers show that the ex­act op­po­site was true. And they would never rec­og­nize that the struc­tural deficit is the prod­uct of deep re­duc­tions in cor­po­rate taxes.

The ide­o­log­i­cal ex­trem­ism and rigid­ity of Turzai, Reed and their fol­low­ers in the House stand in the way of the com­pro­mises that our elected of­fi­cials must make when dif­fer­ent branches are con­trolled by op­pos­ing par­ties. And their dis­hon­esty about both the source of the struc­tural deficit and their own pro­pos­als height­ens ide­o­log­i­cal ex­trem­ism.

Repub­li­can pres­i­dent of the Se­nate Joe Scar­nati put it bluntly, “This is not gov­ern­ing. It is an em­bar­rass­ment.”

This is not nor­mal and must not con­tinue. The whole state, in­clud­ing the con­stituents of the ex­trem­ists, are suf­fer­ing. Good gov­ern­ment will be im­pos­si­ble in our state if this ide­o­log­i­cally-ex­trem­ist fac­tion is un­will­ing to obey the fun­da­men­tal prin­ci­ples and norms upon which it rests.

AS­SO­CI­ATED PRESS

The Penn­syl­va­nia Capitol build­ing in Har­ris­burg. The state now has a bud­get plan, but al­most no one is happy with it.

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