Thursday, the Independent Fiscal Office issued its Five Year Economic and Budget Outlook report which projects Pennsylvania’s General Fund budget will run a deficit starting at nearly $1 billion in FY 2018-19 rising to over $2.1 billion in FY 2022-23.
Specifically, the IFO projects deficits of $988 million in FY 2018-19; $1.865 billion in FY 2019-20; $1.774 billion in FY 2020-21; $1.784 billion in FY 2021-22; and $2.189 billion in FY 2022-23.
The estimates take into account the revenue and borrowing package signed into law on October 30 which IFO said would generate about $2.3 billion in FY 2017-18.
The “good news,” the IFO said, is these deficits would have been between $800 million to $1 billion a year worse without the revenue package and certain cost containment measures taken this year. Click Here for more.
State Borrows $1.2 Billion From Itself
Also on Thursday, State Treasurer Joe Torsella announced Treasury received a request from the Governor’s Office of the Budget to draw $1.2 billion from the $1.8 billion line of credit authorized on October 27. Click Here for more.
State Borrows $1.5 Billion From Tobacco Fund
As authorized by the budget revenue package in October, the Commonwealth Financing Authority Tuesday voted to borrow up to $1.5 billion against future revenues from the Tobacco Settlement.
The CFA action at least temporarily put on pause the $1.2 billion borrow plan Gov. Wolf had proposed by the Liquor Control Board. But a spokesperson for the Governor said he will support the CFA borrowing as long as it is structured responsibly.
$94.9 Million Senate/House Surplus
Meanwhile, the Senate and House have more money than they can use. The Legislative Audit Advisory Commission Wednesday released the findings of the FY 2016-17 fiscal year audit of legislative accounts which found a surplus of $94.9 million in Senate and House operating accounts.
At least that’s down from a surplus of $118 million in FY 2015-16, during the longest budget stalemate in the state’s history. Click Here for more.
Turzai Jumps In/Wagner Counters
House Speaker Mike Turzai (R-Allegheny) Wednesday announced he would be running for Governor after all saying Pennsylvania is lacking a leader in the Governor’s Office. He immediately set out on a short tour across the state.
On the same day, one of his opponents for the Republican nomination-- Sen. Scott Wagner (R-York)-- announced he was endorsed by 64 GOP party leaders.
Like Turzai, the two other announced candidates in the field are also from Pittsburgh-- Paul Mango and Laura Ellsworth.
Meanwhile on the other side, John Fetterman, the Mayor of Braddock, PA,” is running for the Democratic nomination for Lt. Governor challenging incumbent Mike Stack (D-Philadelphia).
The other announced candidates are activist Aryanna Berringer, of Westmoreland County, and Chester County Commissioner Kathi Cozzone. Thinking about running is Rep. Madeleine Dean (D-Montgomery), a former LaSalle assistant professor, lawyer and progressive.
The only announced Republican candidate for Lt. Governor is Jeff Bartos, who last week appeared with Scott Wagner saying they are running together, even though in Pennsylvania they are elected separately. Former Rep. Gordon Denlinger, from Lancaster County, said he is considering a run for the Republican Lt. Governor nomination.
Interestingly, the Senate State Government Committee held a hearing this week on changing the way Lt. Governor’s are elected to amend the constitution to have the Lt. Governor run with the Governor on the same ticket to avoid the present confusion of electing Lt. Governor separately. Three former Lt. Governors and two party chairs agreed the process has to change.
What’s Next?
The House returns to session Thanksgiving week for two days, then does not return to Harrisburg until December 4. The Senate returns December 11.
The House has two critical issues to address: reauthorization of Pennsylvania’s Children’s Health Insurance Program (by December 31) which became controversial over public funding for surgery to change genders and Workers’ Compensation Program prescription reform.
The other end-of-the year issue is Unemployment Compensation Program call center and back-office computer funding.
Republican House leadership also promised a vote on a natural gas severance tax wanted by Gov. Wolf, but that is not part of the budget agreement.
The House has 11 voting days scheduled in November and December and the Senate has 6, but they are both set to adjourn on December 20 as of now. Bills do not die this year and continue into 2018.
The Senate has announced it will be in voting session for 42 days from January 2 to June 29 of next year. The Senate will hold budget hearings from February 20 to March 9.
The Governor’s FY 2018-19 budget address has been announced for February 6, so we can start this all over again.
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