Pennsylvania: Gov. Wolf delivers bitter and confrontational budget address

Last week, Pennsylvania’s governor Tom Wolf gave what he promised would “not be an ordinary governor’s budget address.” And indeed, he was right. His 2016-17 speech was combative, pessimistic and full of uncomfortable truths regarding the state’s fiscal affairs, including the fact that between the three ratings agencies, Fitch, Moody’s, and Standard and Poor’s, Pennsylvania’s credit has been downgraded five times over the last five years. Three of these downgrades have occurred in the last two years. This will cost an extra $139 million annually on its $17 billion debt.

The speech follows the governor’s late December signing of a partial budget into law, after striking out numerous line items, which we discussed at the time. With his vetoes, Gov. Wolf attacked Republicans for their plan to eliminate $95 million from education, among other things.

The budget impasse continues, and Gov. Wolf laid out the details of the crisis as he sees them: Pennsylvania faces a $2 billion budget deficit that renders the state unable to meet its most basic obligations this year. Absent a proper budget solution:

• “Nearly three-quarters of Pennsylvania homeowners will see their already-too-high property taxes skyrocket even further,” because school districts have had to increase local property taxes by $1.2 billion.
• The education system will “take a ruinous hit,” in the form of layoffs of more than 23,000 education professionals, including teachers, guidance and career counselors; a ballooning of class sizes with disproportionate effects on the poorest schools; and reductions in technical, special education and Head Start programs.
• Public services will face “devastating cuts,” in the form of nearly $200 million in services to seniors citizens, including prescription drug assistance and home and community based services; $180 million in assistance for people living with mental illness or intellectual disabilities; a total cut of nearly $90 million that affects 211,000 children, $40 million of which comes from state funding for child care and $50 million of which comes from federal matching funds; and $11.5 million in funding for domestic violence shelters and rape crisis centers. These programs make up nearly 75 percent of the state’s human services budget.

The crux of the budget impasse is a fundamental disagreement in priorities between the executive and legislative branches of Pennsylvania’s government. As Gov. Wolf sees it, drastic cuts lawmakers enacted in education programs were destructive because they were unsustainable, and also because they shifted the burden of funding schools to local governments without actually contributing to a balanced budget solution. Instead, he preferred to invest in schools, and to that end, went along with Republican proposals to make historic changes to the pension and liquor systems.

The governor denounced the fact that although the final budget was balanced and included compromises that Republicans wanted, “House Republican leaders just…walked away… Only in Harrisburg could that be seen as an acceptable way to do business.”

Gov. Wolf’s pugnacious manner persisted to the end of his speech. He closed with the warning to “each of you in this chamber: We are going to have to stop playing games with our fiscal future. We are going to have to stop closing our eyes and hoping our problems go away. We are going to have to face facts. So do not send me another budget full of gimmicks that are too cute by half. Do not send me another budget where the numbers simply don’t add up.”

Not surprisingly, people are more than frustrated. For example, in an article titled Schools: New Wolf budget illogical, 'almost futile', Philly.com reported that one administrator, the Philadelphia School Superintendent, is “baffled and furious” because schools cannot afford further delays or funding instability. Even so, he supports the governor's call for a responsible budget that restores and fully funds pre-K-to-12 education.

Similarly, the superintendent of the Phoenixville Area School District regrets that his system will only make it through to the end of the school year by tapping into its $ 8 million reserve. “That puts us in a bad position, because we are going out for bonds as the district moves forward on construction of two new schools…All sides need to get together to do a budget. That is their constitutional obligation.”