PA Economy Cannot Sustain Proposed State Budget
Harrisburg is once again racing toward the June 30 budget deadline, and the question before lawmakers is bigger than whether they can get a deal done on time. After last year’s 135-day budget impasse, Pennsylvanians deserve more than another last-minute agreement held together by gimmicks and wishful thinking. Our taxpayers deserve a budget that can survive the next downturn and stop pretending state government can spend faster than taxpayers can earn.
Governor Josh Shapiro’s proposed 2026–27 budget is being sold as an “investment” agenda. That is the language Harrisburg always uses when it wants to spend more. Beneath the branding is a basic math problem: the governor’s $53.26 billion proposal would increase spending by $2.72 billion, or 5.4%, while revenues under the current tax structure are projected to grow by only $919 million, or 1.9%. To make the numbers work, the plan would require $6.5 billion in new revenue.
Pennsylvania’s Rainy Day Fund exists for emergencies and economic downturns, not to reinforce a recurring spending problem. Using reserves to balance a budget may make the spreadsheet work for one year, but it does not solve the structural deficit. This tactic simply moves the bill to next year, when taxpayers will be asked to pay again.
The Independent Fiscal Office has already made the danger clear. Pennsylvania faces a structural deficit that could grow substantially in the years ahead, and the state’s financial reserves could be exhausted as soon as the 2027–28 fiscal year if lawmakers keep using them to support spending levels the economy cannot sustain.
This is the real debate in the June budget negotiations. Not whether education matters. It does. Not whether public safety matters. It does. Not whether infrastructure, health care, and economic opportunity matter. They do. The question is whether Harrisburg can fund core priorities without building a budget that depends on one-time money, speculative revenues, and future tax hikes.
Right now, Senate Republican leaders are raising exactly the concerns taxpayers should want raised: the House has advanced the governor’s budget framework, but the Senate has warned that the spending level is too high and that any final deal must better respect taxpayers now and in the future.
Families across Pennsylvania make hard choices every day. They delay purchases, cut expenses, compare prices, and save for emergencies. Small businesses are forced the same. They cannot declare every want a necessity. They cannot use a savings account as permanent income. They cannot count on a future tax scheme to cover today’s payroll.
Harrisburg should not get a pass from the rules everyone else lives by.
The right answer is not another temporary patch. The right answer is rules-based budgeting.
That is why the Responsible Budgeting Act, introduced as House Bill 1947 by Rep. Tom Jones, deserves serious attention this legislative session. The bill would put long-overdue guardrails around state spending by establishing a limit on fiscal year spending, addressing emergency spending, creating requirements around raising revenue, and establishing a Commonwealth Reserve Fund.
The concept is simple: state government should not grow faster than the economy that supports it. The legislation’s co-sponsorship memo describes a spending limit tied to trend economic growth, a deficit brake, limits on raising revenue, a reserve fund, and rules for emergency spending and surplus revenues, including tax rebates and debt reduction.
In plain English, that means lawmakers would have to prioritize. They would have to make tradeoffs. They would have to defend new spending instead of assuming taxpayers will absorb it.
Critics of spending limits often argue that rules tie lawmakers’ hands, but that is the point. Good rules tie the hands of politicians before politicians tie the hands of taxpayers.
The lesson for Harrisburg is clear: when government avoids hard budget choices, taxpayers eventually pay for the delay.
Pennsylvania cannot tax, spend, and reserve-drain its way into prosperity. A competitive commonwealth needs lower costs, predictable policy, responsible reserves, and a government that understands every dollar it spends first had to be earned by someone else.
The June budget negotiations are a test. Lawmakers can pass another budget that looks balanced on paper while deepening the structural deficit underneath. Or they can choose a better path: discipline over denial, taxpayers over special interests, and long-term stability over short-term applause.
Pennsylvanians are not asking Harrisburg to do the impossible. They are asking Harrisburg to do what they do every day: live within its means.
This is Emily Brey, State Director with Americans for Prosperity-PA.
