With three weeks of budget hearings in the books, lawmakers are scheduled to return to session next week with two budgets to complete: the portion of this year’s budget blue-lined by Governor Tom Wolf in late December and the spending plan for FY 2016-17. If something doesn’t happen quickly on one or both budgets, Standard & Poor’s threatens to drop Pennsylvania’s rating to the lowest among all states.
Pennsylvania’s fiscal mess and looming reduction in its credit rating are entirely unnecessary. This year’s budget, as Rep. Matt Gabler (R-Clearfield) said, should "practically write itself."
"The funds are there," Gabler said, "ready to be spent. Even if we were going to raise the taxes the governor wants the funds wouldn’t come in in time with only three months left in the fiscal year. It’s disgusting that the money is just collecting dust in the Treasury instead."
The money blue-lined by the governor is "collecting dust" because it should be going to schools, hospitals, and other vital services. Some face the prospect of closing their doors for lack of funding even before the fiscal year ends on June 30. At the same time, the governor, with no authorization, is spending money – "money that he vetoed," as Gabler put it – on various state programs. This includes the mandatory wage increases of $10.15 an hour for all state employees currently under that wage rate with the governor’s latest executive order.
"The taxpayers are already providing funding for the entire current budget – that money is piling up at Treasury," said PMA President David N. Taylor. "Governor Wolf continues to hold political hostages yet he spends taxpayer monies on his personal priorities – without legislative appropriations. These are the unconstitutional actions of a dictator, and must not be tolerated."
Republican lawmakers rightly proclaim the spending is unauthorized and it will set a dangerous precedent of a governor bound by a constitution requiring a balanced budget padding statutory line items as legislatively passed. Making the situation worse, the governor is spending the money with no transparency and no legislative or public oversight.
At a briefing this past Monday at PMA headquarters, Rep. Jim Christiana (R-Beaver/Washington) said that he and many of his colleagues believed that "transparency" was at least one policy the governor and lawmakers would agree on. Now Christiana said he plans to introduce legislation that would move a public oversight program into state government spending, PennWATCH, out from under the administration and place it under the Independent Fiscal Office (IFO).
"The bill would make the IFO a real independent budget oversight office rather than an office that just reports on revenue," Christiana said. "This would give us the spending side as well."
A similar oversight plan Christiana started for public school spending, SchoolWATCH, would help keep tabs on the governor’s "assault on school choice."
There, Wolf’s polices have compelled the Pennsylvania Coalition of Public Charter Schools (PCPCS) and 20 separate charter schools to file legal action Feb. 5 in Commonwealth Court against the state Department of Education. PCPCS Executive Director Robert Fayfich said the actions taken by the Education Department and the governor would "undermine the financial viability of every charter school in the state."
Among the changes in the proposed in the 2016-17 Wolf budget is the requirement that charter schools return to school districts all money in their reserve funds at the end of each school year. Another would reduce cyber charter tuition amounts to levels that reflect the school’s "structural realities" of not maintaining the same physical facilities as brick-and-mortar charter schools.
The proposals come just a month after the governor used charter school’s portion of the state Ready to Learn Block Grant money, intended for programs aimed to improve achievement, to reimburse school districts for a part of their charter school tuition costs.
Besides squashing school choice, the governor, as Taylor said, has some "devotional drive" to raise taxes and spend more money. "Nowhere is there any effort to increase efficiencies in government or in any way justify the taxes or additional spending," he said.
Lawmakers have a few options when they return to session next week, none of them guaranteeing that schools and other services will have a steady funding stream, or ward off a lower credit rating. They could continue to pass supplemental budget bills as they did in mid-February to cover corrections, hospital-based burn centers, and other services. Additionally, waiting in the wings are bills to restore funding for Pennsylvania’s 14 critical access hospitals (CAH) and to restore Medicaid payments for obstetrics and neonatal services in hospitals. Or lawmakers could send the governor an omnibus bill to cover the entire 13 percent of funding the governor blue-lined in December. There’s no guarantee, of course, the governor wouldn’t veto the bills, and the Republicans would be short the votes for an override.
Meanwhile, Pennsylvania is neck-and-neck with New Jersey, Illinois and Kentucky for one of the worst credit ratings in the nation as Standard & Poor’s considers yet another reduction for the Commonwealth.
S&P has threatened to cut Pennsylvania’s AA-minus rating for general obligation debt by one or more notches, which would put us on par with those other states. The tragedy is that suffering inflicted on the schools, burn centers, critical care hospitals, other essential services, and the looming damage to the state’s credit rating are all the product of a unsavory political game, and all of this is entirely avoidable.