Citizens Alliance of Pennsylvania

Wolf to Demand Even More Spending, Despite Claiming There is a Structural Deficit

On Tuesday, February 9th, Governor Wolf will offer his annual budget address.

Despite being unable to force the legislature to raise taxes to cover a laundry list of campaign promises, Wolf will demand that the government spend even more money in his second budget address. This shouldn’t come as a surprise to anyone. Governor Wolf has been a broken record when it comes to calling for spending more money. How it makes sense from Wolf’s perspective to demand more spending and simultaneously insist that we have a “structural deficit” is anyone’s guess. If there were a structural deficit, the rational thing to do would be to cut spending. Considering the odd juxtaposition of demanding more spending and claiming a deficit, it was a smart move on his part to avoid the ironic humor of offering his budget address on Groundhog Day.

The Governor will likely offer a vision of the next budget filled with rainbows and unicorns for everyone. He is unlikely to offer any concrete plan to pay for it, outside of calling for one group or another to pay their “fair share”. For his 2015-2016 budget, Wolf singled out the natural gas industry as the source of nearly limitless tax revenue; at least, that is how he presented it. Thankfully, the legislature did not fall into this trap. All of the states who rely on severance tax revenue to meet their regular budget needs are in an incredible bind as the result of the collapse in the price of oil and gas. All of the other tax proposals that Wolf offered to pay for his spending binge were ultimately rejected by the General Assembly.

One way to streamline the budget process this year would be for the House and Senate to do something unusual for the government. Typically, the legislature has decided how much money it was going to spend and then scramble to determine who has to come up with the money to pay for it. This is the opposite of how things are done in the real world. This year the General Assembly should determine how much money is available first and then decide how to spend it. Families do this all the time, that is why they generally have food to eat but may not be able to take a vacation. The Governor and General Assembly would be smart to follow the same example.