Heat on Harrisburg
Keep pressure on to solve revenue side of budget
He’s warned them. State Treasurer Joe Torsella has made it clear to lawmakers and Gov. Tom Wolf that, absent a revenue package to support the new budget, the state could run out of money to cover all of its bills as soon as late August.
What happens then? Mr. Torsella, a Democrat, says he may have to make some decisions about which bills to pay and which to defer.
The GOP-controlled Legislature and Mr. Wolf, a Democrat, shouldn’t put him in that position or jeopardize the services that Pennsylvanians fund with hard-earned tax dollars. Mr. Torsella’s warning should spur legislators and Mr. Wolf to finish the job.
On June 30, the Legislature passed a budget of nearly $32 billion for the current fiscal year. But it didn’t include a revenue package to support the spending plan. Mr. Wolf allowed the budget to become law without his signature and, since then, legislators and the governor’s office have grappled with the revenue portion, including how to cover a $1.5 billion deficit from the past fiscal year and a $700 million shortfall projected for the current one.
How far apart are the parties? Even House Republicans are at odds with one another. House Speaker Mike Turzai, R-Marshall, in recent days has injected himself into talks previously guided by Majority Leader Dave Reed, R-Indiana. Mr. Turzai wants to hold the line on taxes, borrow money and take it from specialized funds.
The plan was debated over the weekend without going to the rank and file for a vote. Steve Miskin, spokesman for House Republicans, said Mr. Wolf has proposed an unacceptable plan of “taxes, then more taxes, and then additional taxes.”
The clock ticks. Thanks to a feature Mr. Torsella added after taking office in January, Pennsylvanians can go to patreasury.gov and see the general fund balance in real time. As Mr. Torsella tells it, without a revenue package, it’s soon going to start dropping like a rock.
Mr. Miskin has said Mr. Torsella’s “publicity interviews” aren’t necessary because budget negotiators understand the stakes. Still, Mr. Torsella is right to apply what pressure he can, partly because of the tough decisions their lack of action could force him to take.
As money dries up — some months will be leaner than others and the general fund could run a negative balance for as long as eight months — Mr. Torsella said he would have to decide which bills to pay. Also, if lawmakers and Mr. Wolf looked to borrow money, Mr. Torsella would have to decide whether to approve a loan from the treasury or the private market.
Mr. Torsella said he doesn’t want the treasury to become a “crutch” for Pennsylvania’s perennially dysfunctional budget process. At the same time, he’s leery about a private loan for a state that can’t get its financial house in order.
There’s also the problem of perspective. As Mr. Torsella notes, budget negotiators are focused on the rest of the fiscal year when they should be focused on the state’s longterm prosperity and quality of life.
No one wants a repeat of the months-long stalemate of 2015-16 that choked off funding to school districts and social service agencies, pushing some to the brink of insolvency. Mr. Torsella isn’t using the word stalemate yet, saying he believes the parties are working hard to strike a deal. Mr. Torsella should hound them so they work a little harder.