"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness . . . " So begins Charles Dickens’s novel A Tale of Two Cities. It is set in in the years prior to the French revolution, but actually applies to the recent performance of Republicans in the Pennsylvania legislature.
As official Harrisburg prepares for what is shaping up to be another epic budget battle, the big question is: which GOP will show up in 2017? Will it be the Republican-controlled legislature that last year stood its ground and fought Governor Tom Wolf’s historic tax and spending proposals, or will it be the GOP that this year folded like a cheap suit and approved $1.4 billion in new spending?
The $1.4 billion spending hike might not qualify as the worst of times, but coming on the heels of a successful struggle against the Wolf Administration’s spending demands it did leave a lot of folks puzzled. After winning the longest budget fight in state history, why turn around and cave in months later? This leaves most observers – and quite a few participants – at a loss when it comes to predicting how the 2017 budget war will unfold.
We are certain of a few things.
The toxic stew of tax increases and new taxes cooked up to pay for this year’s massive spending increase has failed to live up to expectations. To date, revenue collections for the 2017-2018 fiscal year are running $261.8 million below estimates. This, coupled with a "structural budget deficit" pegged at over a billion dollars means the new budget will begin with a significant gap between spending and revenue.
We also can be sure that Governor Wolf will again demand massive spending increases and the taxes to pay for that spending. He used his budget address this year to lecture the General Assembly for its refusal to accede to his spending demands. Since most of his priorities have not been funded chances are they will be dusted off and included in his new budget proposal.
But should Republicans sit back and wait for the governor to set the agenda? Leo Knepper of the Citizens Alliance of Pennsylvania, a pro-growth PAC, suggests a different course of action. "If Republicans in the General Assembly were smart, they would upend a long-standing budget tradition and go on offense," Knepper wrote in a recent policy brief. "(They) should ignore tradition and pre-empt the Governor’s budget address with a plan of their own." Knepper observed this would "force the governor to play defense rather than the usual offensive position granted to governors."
The question remains, however, whether or not legislative Republicans – or at least the leaders who actually sit at the negotiating table – want to go on offense. Will the resolute leaders who fought and won the first budget battle show up to play, or the ones for forfeited this year’s game?
The final certainty is that all this will play out against the backdrop of the rapidly approaching 2018 election for Governor. For his part, Governor Wolf will want to deliver the goods of higher spending to his largely urban constituency.
It won’t be so simple for Republicans.
With a number of legislators, including leaders who will negotiate the new budget, eying a race for the Republican gubernatorial nomination, the upcoming budget battle is fraught with peril. There are pressures for leaders to "be responsible" and give into spending demands. But with a veto proof Senate majority and a historically large majority in the House, voters are not likely to be either understanding or forgiving if the GOP doesn’t stand firm.
Will it be the "best of times" with legislative Republicans going on offense and standing up to a tax and spend governor, or will it be the "worst of times" with the taxpayers of Penn’s Woods getting stuck with yet another round of tax hikes? As the budget process begins a new cycle it is impossible to tell which of the GOP’s split personalities will emerge dominant in 2017, but both the pocketbooks of taxpayers and the political fortunes of many politicians will be affected by the outcome.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is [email protected])
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