Independent Fiscal Office Casts Doubts on Wolf’s Rosy Budget Outlook

Member Group : Center Square

The Center Square) – An update from the Independent Fiscal Office will give Republicans more reason to criticize Democratic Gov. Tom Wolf’s proposed budget.

At issue are future spending levels.

The Wolf administration is optimistic about the general fund’s cash reserves and limited spending growth, while the Republican-controlled General Assembly argues that Wolf’s budget creates future deficits and unlikely low-spending levels.

“Our budget surplus is not an excuse for a spending spree – but it is a chance to make more investments that can open the doors to opportunity for more Pennsylvania families,” Wolf said in his budget address in February. Wolf proposed a $43.7 billion budget, up from $39.6 billion in 2020-21.

“Current and future taxpayers will suffer the consequences of today’s fiscal irresponsibility included in this proposed budget,” said Sen. Kristin Phillips-Hill, R-York. “The governor’s budget proposal follows the federal government’s playbook – spend today and make it someone else’s problem tomorrow.”

The IFO’s update to its five-year projection for the general fund favors Wolf’s interpretation in the short run, but Republican critics in the long run. General fund revenues are expected to increase 2.7% annually through 2026-27, and expenditures to increase 2.4% annually through 2026-27, but inflation and other factors will turn a budget surplus into a budget deficit.

Pennsylvania’s general fund would go from a surplus of $6.8 billion in 2021-22 to a deficit of $12.1 billion in 2026-27.

Wolf’s administration, however, has cast doubts previously on IFO estimates. During a Senate Appropriations Committee hearing on March 17, Budget Secretary Gregory Thall doubted that the Commonwealth’s sales tax revenue would decline, as the IFO anticipates.

The state government has until July to approve a final budget.

Staff Reporter

Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal. He is managing editor of Expatalachians, a journalism project focused on the Appalachian region.