Pennsylvania’s fiscal future looks bleak
The COVID-19 pandemic has left its mark on every aspect of our world. There is practically no area of our economy, our healthy communities and our family lives, which haven’t been affected, in some way, by this novel coronavirus. From unemployment to business closures, not to mention unprecedented illness and death, our lives have been changed forever.
While each of us tries to navigate the current circumstances, trying to figure out what the phrase “new normal” really means is becoming more and more challenging as the days go by. Where we thought we might be months ago is almost certainly not where we are today.
The fiscal situation in the state will have a lasting, devastating effect on Pennsylvania’s economy. Many constituents argue the only thing that matters is healthcare; frankly, I agree that healthcare is extremely important, but it must be considered equally with the economy, and the reasons are simple.
We can debate whether the primary area of economic concern is taverns, restaurants, construction, personal care services, gymnasiums, etc. But so long as there is any one part of our economy debilitated, then we will all suffer. Why? Most of us, whether we realize it or not, rely on government services — federal, state, county and municipal. There is a roll-up effect on government revenues when the economy is stifled. These services include, but are not limited to: education, K-12, Community College, state-supported and state-related colleges; roads and bridges construction and improvement; road services like repairs and snow removal; mass transit; Medicaid funding; Medicare funding; fire services; EMT services; law enforcement; unemployment compensation; human services; mental health services; and the list goes on.
All of these services rely on government funding. When the economy is stifled, tax revenues are reduced, and thus government services will inevitably be affected. And the effect will not be once and done.
Further, it’s unlikely even after the economy fully recovers, the Commonwealth will be able to realize a $5 billion windfall, so that deficit will remain embedded in the budget into future years.
Similarly in Pennsylvania, our 67 counties, our 500 school districts, our 3,200 or so municipalities will feel the negative impact from this shortage of revenues. It is very unlikely our economy will recover substantially for years to come — and spending will thus be impacted.
Unfortunately, with Gov. Tom Wolf constantly moving the goalposts on what should be the benchmark on this return to life as we knew it, the longlasting effects of this continued isolation and shutdown are far and wide, from increases in mental health needs, unemployment and business closures surely continuing by the day, the overall health of our Commonwealth is at stake.
Part of our duty as lawmakers is to look to the future and decide how we can best provide for our constituents and deciding how to do that postCOVID-19 will surely be difficult. Based on this continued assault on our economy, the financial picture for our future is not good.
For example, Pennsylvania ended the 2019-20 Fiscal Year roughly $3 billion short of projections, meaning we took in significantly less than we committed to spend. Coming together to pass a short-term budget at the end of May allowed us to flat fund government for several months, but the daunting task of determining spending past November will shortly be upon us, and not in a promising way — current projections have the 2020-21 Fiscal Year on track to be short about $5 billion. To put that in context, the great recession only brought deficits of around $2 billion to $3 billion.
I continue to believe our economy can heal faster if the administration takes a dual track to manage the healthcare aspects on an equal footing with our economic considerations. The longer the economic recovery is delayed the more deeply its effects will be felt by each of us.
State Sen. Bob Mensch is a Republican who represents Pennsylvania’s 24th Senatorial District in portions of Montgomery, Berks and Bucks counties. For more information on Senator Mensch’s legislation, visit www.senatormensch.com.