State needs more than smoke to clear budget mess

These are high times in Pennsylvania.

The state is on the brink of a new era of medical marijuana. Entrepreneurs are lining up across the state – and willing to pony up big bucks – for a shot at snagging a license to run either a marijuana-growing facility or a medical marijuana dispensary.

Let’s dispel a few myths off the top: While the plants look like traditional pot plants, this is not intended to hit the streets in leaf form. In fact it is not going to be smoked at all. The pot plants will be processed into creams, tinctures and ointments that will then be distributed via the dispensaries to chronically ill patients dealing with severe pain, and only under a doctor’s care.

All the talk about medical marijuana has led some, including state Auditor General Eugene DePasquale, to once again suggest the state legalize recreational use of pot, slap taxes on it, and rake in the profits.

But let’s be real: Pennsylvania is not going to puff its way out of its budget woes.

Just ask the state’s cigarette smokers. For years every time the state has needed revenue, they lit a match under tobacco users. Just last year Pa. lawmakers slapped a Band-Aid on their budget crunch by tacking another $1-per-pack excise tax on cigarettes.

And where has that gotten us?

It’s gotten us where we are today: With a skyrocketing deficit approaching $3 billion and a “ticking time bomb” in two massive public employee pension funds that are severely underfunded, something that threatens to take a wrecking ball to school budgets across the state who are reeling under the weight of increased pension costs.

It’s clear that whatever else the state does, it must come to grips with two things our elected representatives in Harrisburg have been loathe to do: Cut spending, and increase revenue.

Gov. Tom Wolf has gotten the ball rolling with a series of consolidations and mergers of state government operations. He’s closing a state prison.

And asking the Legislature to slap a fee on townships that rely on state police as opposed to using their own police force.

But even that will hardly put a dent in the state’s fiscal follies. Even some Republicans, who have consistently turned up their nose at nearly every Wolf suggestion of a tax hike – including his calls to boost both the sales and personal income taxes, as well as new levies on the state’s Marcellus Shale industry – are coming to grips with the fiscal reality that there just aren’t many other avenues to balance the budget sheets.

Among them is Rep. Jeff Pyle, R-Armstrong, one of a group of Republicans who realize the state is not going to be able to cut its way out of this mess either.

That leaves the ugliest two words in the Republican dictionary: Tax hike.

“Our solution is always to cut spending, but we know we’re at a pretty bare point right now,” Armstrong said. “So we know we have to come up with some revenue.”

Here’s a suggestion. Yes, we know it’s been offered up before – and usually sacrificed on the altar of partisan politics.

The state’s tax code remains a mess.

At the top of this quagmire is the state’s corporate tax code, which shakes every penny out of a small business while allowing larger corporate entities to shirk paying their fair share simply by setting up shop in other states, in particular next door in Delaware, while operating in Pennsylvania.

Wolf is offering something for both sides in this fight. He wants to eliminate the corporate loophole while slashing the corporate income tax, from 9.99 percent to 6.49 percent.

Then there is that other Republican-protected “elephant” in the room.

The Legislature, where the GOP holds solid majorities in both the House and Senate, continues to rebuff efforts to enact a severance tax on the state’s Marcellus Shale industry, the only major gas-producing state that does not do so.

The state is not going to puff its way out of this financial mess – either via cigarettes or marijuana. Should those revenues be ignored? No.

But it’s time for the state to come to grips with its sea of red ink.

Before we all drown.