The question of the week has been – how is the budget coming along?
The budget question has come in by email, telephone calls and by people that I have talked to face to face.
The answer is very simple – the budget process is at a complete standstill.
The Pennsylvania House and Senate passed a balanced budget on June 30th – even before the balanced budget reached the Governor’s desk he was issuing statements that he was going to veto the budget – within two hours of the budget reaching his desk – without any extensive review or discussions with the House and Senate – Governor Wolf vetoed the budget.
For a recap – the 2014-15 budget was $29,142,312,000 (Billion) – the proposed / balanced 2015-16 budget is $30,179,476,000 (Billion) an increase of $1,037,164,000 (Billion) or a 3.6% increase over the 2014-15 budget.
The budget passed was a responsible budget that did not increase taxes.
So one would ask where is the additional $1,037,164,000 (Billion) coming from ?
Here is the answer:
Stronger state revenues of $412.2 Million as of June 30th for the past twelve months, $200 million in additional revenue through liquor reforms, structural reform to the pension system which is the number one cost driver for the state and school districts – a combined total equal to approximately the one billion dollar budget increase.
On Tuesday July 7th John Micek a reporter for the Patriot News wrote a story titled “The PA Budget is among the priciest in the nation” – click on the link for the full story.
There are two bullet points in the article that jump out and grab your attention.
Point #1 – “Despite proposed cuts to some corporate taxes, Wolf’s proposed $4.5 billion tax package is the largest in the nation, the study found. The administration’s plan raises $1.5 billion from a higher personal income tax and $2.3 billion from a higher (and expanded) state sales tax.”
Point # 2 – “While other states consider a host of measures — from workforce cuts to Lottery expansion – to manage costs, Pennsylvania stands nearly alone in not employing any cost-control measures.”
The take away for readers – Governor Wolf’s tax increase is the largest in the nation and Governor Wolf is not doing anything about managing costs.
So what is Governor Wolf doing to solve the budget impasse?
Today as I write this email Governor Wolf is visiting a school district in Southeast PA promoting his budget and more public school spending….and….Governor Wolf is hitting the airwaves via TV ads funded by the National Democratic Governors Association who have in turn received contributions from public sector unions to criticize House and Senate Republicans over the budget.
Let me be loud and clear – “PA DOES NOT have a revenue problem – it has a spending problem.”
Instead of sitting at the negotiating table today with House and Senate leaders Governor Wolf is out of the office acting like he is running a political campaign.
I am a member of the Senate Appropriations Committee – this past March and April I personally sat through 33 budget hearings ranging from 1.5 hours to 3.5 hours – at least 80 – 100 hours of hearings.
As I have stated before, Senate Appropriations Chairman Pat Browne, who is a tax attorney and CPA, has done a commendable job leading the budget process.
I would be remiss if I did not also recognize all Senate Appropriations Committee members and Appropriations staff for their efforts.
In addition – I am a private sector business owner with over 35 years of private sector experience who has survived in business because I had to fully understand the concept of revenue and expenses, and how to read a financial statement inside and out.
Governor Wolf believes the solution to solve the budget issue is to allow his administration to discredit and insult Republicans via TV ads paid for by public sector unions and press releases from his office.
As always – I want feedback from my readers – if you are OK with tax increases please send me an email telling me so.
P.S. I just learned in the last 30 minutes that Governor Wolf announced that he intends to veto SB1 – the pension reform bill – so Governor Wolf will be 3 for 3 – he vetoed the budget, liquor store privatization and pension reform is next.