Northwestern Press

Monday, December 16, 2019

Guest View

Wednesday, July 17, 2019 by The Press in Opinion

State budget is smoke, mirrors and contradictions

After Gov. Tom Wolf introduces the state budget in February, legislators spend a lot of time debating, horse-trading and using it for point-scoring with constituents before its scheduled passing by June 30.

Along the way, there is posturing by both parties and the governor as they plead their respective cases to taxpayers about special interests. It might be education, minimum wage, health care or any of another dozen or so hot-button topics.

In the end, there is this frantic flurry of activity to try to beat the deadline. In the process, we get an avalanche of bills, which many legislators complain they do not get a chance to read and digest properly and wind up passing, because there may be some elements of a bill which do deserve support.

This is how we get bad legislation, which usually must be corrected later after its flaws are realized. If you need a classic example I need only point to the new fireworks law that was passed last year.

Just about everyone I have spoken to in our five-county coverage area has condemned the almost nonstop nighttime noise and explosions which have accompanied this year’s Fourth of July celebration.

It started on the weekend before Independence Day and continued through the weekend after the holiday. To most lay people, any budget — whether federal, state or local — is mystifying in the extreme. Pennsylvania mandates that the General Assembly passes and the governor signs a balanced budget.

Taxpayers see this as reasonable. In fact, many wish they had a “law” that would require them to do the same with their personal finances. Let’s say you want to buy a used car for $12,000, but your bank account showed just $2,500. Hey, not to worry, just borrow the rest, and, presto, within minutes you are driving down Route 248 in your new vehicle. So what if you have to pay back hundreds of extra dollars in interest.

The state does this, too. Wolf wants to float a bond issue for $90 million to help counties pay for new voting machines that leave a paper trail.

The state Constitution requires that the state budget’s expenses cannot be more than projected revenue.

In other words, the commonwealth’s founders warned: Don’t spend what you don’t have. Great, right? But, for the sake of argument, let’s say legislators wanted to spend $1 billion more than the nearly $35 billion they just approved, and Wolf signed off on it. They could fudge the revenues to make up the difference, because, after all, some of these numbers are just guesstimates anyway.

Are all of these numbers just phoney-baloney? Yes and no. If lawmakers are projecting what gambling might bring in, they haven’t a clue as to the real number, so they can factor in a hoped-for percentage increase over the previous year and add or subtract any unique specifics.

They can’t tell, for example, if the economy will suddenly go sour, or if there will be a major new competitor in the marketplace. While we are talking about “sin” taxes, you have got to hand it to our legislators. They have found the mother lode in their bargain with the devil.

Can you imagine what our state budget would look like these days without all of the gambling revenue from casino games and now sports betting? And how about the expansion of liquor sales into grocery stores and elsewhere? Can legalized recreational marijuana sales be far behind?

The state raised nearly a billion dollars more in revenue last year thanks to increased corporate taxes, sales taxes on online purchases and the highest casino taxes in the nation, but much of it was needed to cover cost overruns.

Still, it was able to stash away about $350 million into the rainy-day fund for future emergencies. That might sound like a lot, but it would only keep the state afloat for about 23 days.

A major disappointment for the governor was his inability for a fifth time to convince legislators to increase the $7.25-an-hour minimum wage. He wanted to bump it up to $12 an hour immediately, then increase it by 50 cents an hour until it reached $15 in 2025.

Democratic federal legislators are also trying to increase the minimum wage, which hasn’t risen in 10 years, but Republicans, including Dan Meuser, whose district includes Carbon and Schuylkill counties, mostly oppose it. They believe it would crush many small businesses.

According to the nonpartisan Congressional Budget Office, boosting the minimum wage to $15 an hour would raise the salaries of at least 17 million workers and lift 1.3 million out of poverty. The trade-off, however, is that it might cost the country 1.3 million jobs.

Pennsylvania is one of 20 states that still use the $7.25 minimum wage, even though every one of the contiguous states has raised theirs. It’s $11.50 an hour in New York and will go to $15 on Jan. 1. It’s $10.10 in Maryland, $10 in New Jersey, $8.75 in Delaware (goes to $9.25 in October) and West Virginia and $8.55 in Ohio.

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Editor’s note: Bruce Frassinelli is a former newspaper editor and currently a contributor to the opinion page of the TIMES NEWS, Lehighton, our sister daily newspaper.