As the June 30th deadline looms, we have little more than rumors about what kind of Pennsylvania budget might be enacted by the General Assembly for 2016-17. But while some may find optimism in talk of getting the budget done, the rumors we are hearing about the details of the budget in the works are extremely worrisome.
We know that everyone on both sides of the aisle wants a budget done more or less on time. All members of the House and half the members of the Senate face reelection in November, and none of them want a long drawn-out budget and delays in funding schools and human services. Yet to reach agreement on a budget legislators have to find their way between their determination to get one done and the structural deficit that requires either some new revenues or difficult budget cuts.
More importantly, reaching an agreement is not the only thing Pennsylvanians want. The state has serious needs — for K-12 and higher education, for human services, and for environmental protection — that are not being met now. And those needs must be met responsibly, with an honest budget that closes the structural deficit with real revenues or genuine cuts, not smoke and mirrors.
Unfortunately, if the rumors we hear are true, the budget likely to come out of the House of Representatives later this week won’t meet any of those goals. We are hearing that the House is not looking for nearly enough revenue to close the deficit and is hundreds of millions short of where the Senate thinks it should be. We are hearing that this not only leaves almost no new funding for K-12 education, let alone higher education, but it will require cuts to human services. We are hearing that both those cuts and revenue projections will rely on estimates of lapsed spending, human service caseloads, and revenues that are extremely optimistic. We are hearing that the Liquor Bill, which we opposed, is projected to raise new revenues at a wildly optimistic rate. We are hearing that the extremely ambitious gaming and tobacco revenues the House is considering may not all get through the Senate. And we are hearing that the House is planning to pass a fiscal code bill that includes education provisions that are unacceptable to those of us who value public education.
And that means we are looking, at best, at one more dishonest Corbett-like budget, balanced with WD-40 and duct tape. No one in Pennsylvania, whether liberal or conservative, should want a budget like that. And no one who values shared prosperity in Pennsylvania should want a budget that fails to invest sufficiently in education, human services, and the environment.
It doesn’t have to be that way. No one, including we at PBPC, wants to raise broad-based taxes on working people and the middle class. But, as we have shown, it is possible to institute a small .93% increase in the tax rate on what we call income from wealth (dividends, capital gains, business profits, royalties) and raise $775 million. Two-thirds of the revenue raised would come from those in the top 5% of incomes, while families in the bottom 60% would pay very little.
Right now, however, all the talk about the newfound comity in the Capitol seems to be leading not to a genuine compromise, but to the House pushing an extremist agenda while everyone else is exhausted and rushing for the exits. Passing a budget on time is, however, far less important than passing a budget that meets the needs of Pennsylvania and that’s genuinely balanced. We hope the Senate and the governor find the energy to stand up to what looks to be a disastrous House proposal.