House Republicans in the state Capitol have revealed a plan to pull more than $2.4 billion from various government agency reserve funds and other accounts to fill the state’s budget deficit, LNP reported Wednesday. The plan would include one-time transfers such as $100 million from the Keystone Recreation, Park and Conservation Fund; $359,000 from the Job Training Fund; $357 million from the Public Transportation Trust Fund; $27 million from Conservation Easement Fund; $72 million from the Environmental Stewardship Fund, among others. State lawmakers passed a $32 billion 2017-18 spending plan in July without a way to pay for it.
The money for the budget has to come from somewhere, and you have to hand it to some House Republicans for performing the fiscal gymnastics required to locate the remote outpost we now call “Somewhere.”
Who knew such a place existed? It’s a place where, apparently, large sums of surplus cash are just waiting to be wheelbarrowed away and used to fill this year’s budget crater.
We’d like to think there is a better way to fund a state budget than raiding the rainy day funds of some state agencies that were responsible enough to operate in the black. Although, one could argue that, at least for Pennsylvania, this is the rainiest of days.
As LNP’s Sam Janesch reported, members of the Taxpayers' Budget Working Group said they spent the last six weeks examining hundreds of reserve accounts and narrowed in on 41 to produce the $2 billion needed.
We realize the state is in desperation mode. Gov. Tom Wolf has warned that he will soon begin making decisions on freezing spending, which could affect schools, emergency response and other services on which Pennsylvanians rely.
And while creating what one Republican lawmaker called “a shadow budget” might be resourceful, it’s far from an optimal, long-term solution. House Democratic Leader Frank Dermody even questioned the legality of the transfer.
“I’m deeply concerned this plan would lead to destructive cuts in programs and services that Pennsylvanians need to have, such as education, health care and a half billion dollars cut in transportation,” Dermody said in a statement.
As Janesch reported, two Republican lawmakers from Lancaster County — Reps. Dave Zimmerman, of East Earl, and Brett Miller, of East Hempfield — participated in the 18-member group.
Miller said that “not a single one of these programs and their operations will be affected.” He pointed out that “these are excess dollars that are not being used. Period.”
Karen Martynick, executive director of Lancaster Farmland Trust, says that’s not the case.
“While we recognize the enormously difficult task the Legislature and governor face in closing the budget gap, the proposal to transfer so-called reserves from a variety of special accounts is ill-conceived and will jeopardize current and future funding for farmland and open-space preservation, conservation programs, parks, trails, and other critical environmental programs,” Martynick said, in an email. “The transfers are not ‘extra’ money that has been accumulating in a ‘shadow budget.’ In fact, it is money that has been set aside to fund current and future approved projects.”
If the plan wins approval, there’s another issue: The rainy day funds of those agencies will be gone. And if the monsoon hits them, well, that’ll be a problem.
Perhaps we should look at this on a more personal level.
Your child comes to you and excitedly says, “I’ve saved $100!” But instead of responding with something like, “Hey, that’s great! I’m so proud of you.” You say, “I’m afraid I’m going to have to take that money. I overspent this month ... you know, big screen TV, trips ... you know how it is. Bottom line: I have to pay the electric bill. Tough luck, kid.”
House Republicans say they’re doing this because they don’t want to raise taxes on Pennsylvanians already burdened with rising property taxes.
“Until and unless every source of reserve revenue is exhausted, we should not, and are not, asking more of our taxpayers,” Rep. Dan Moul, an Adams County Republican, said during a news conference on Tuesday.
We understand the rationale, and based on letters from our readers, the last thing most Lancaster residents want to see is a tax increase.
There are alternatives. For example, the Senate Republican funding plan calls for a 2 percent severance tax on Marcellus Shale natural gas drilling. The tax is expected to generate $100 million each year. Perhaps the tax could be increased, even modestly. Gov. Wolf originally wanted a 6.5 percent tax. Rep. Mike Sturla, a Lancaster Democrat, is proposing a 5 percent tax. Can we meet in the middle?
If some sort of compromise can be reached, fewer state agencies would have to give up their rainy day funds and the state would have a long-term revenue source.
More than anything else, what this budget process has lacked, and still lacks, is meaningful, constructive input from Republicans and Democrats. And that is what is so distressing.
We understand that lawmakers are desperate in September to fund a budget that was passed July.
As absurd as that sounds, the reality that our lawmakers on both sides seem utterly incapable of coming together on issues that affect the day-to-day lives of Pennsylvanians is even more bewildering.
Even more so than the long and winding road to “Somewhere.”