2017-18 State Budget News
In lieu of the tax package sent over by the Senate, members of the House of Representatives met for weeks to come up with an alternative plan to balance the budget without increasing taxes on the citizens of the Commonwealth. This group expanded on work started in February by the entire caucus and worked with members of the House Appropriations Committee to come up with a little more than $600 million in surpluses and proposed transferring of the surpluses from these restricted accounts.

The funds, outlined below, were identified by the group through a myriad of factors. Most importantly, by using the Pennsylvania Treasury’s Transparency Portal, the group looked at past ending balances and a three-year average of expenditures and revenues collected to make sure that any operations were not affected. The group also contacted all the agencies in which these funds fall under to request information on any dedicated or encumbered money in the accounts.

Click here to review the fund transfers.

The end result of this work yielded a total of $630,500,000 deemed as surplus money in these funds. Before I joined my colleagues in the House passing the measure to transfer the surplus identified into the General Fund to address the shortfall in the budget, I made comments in the House chamber explaining my support for the plan. Those comments can be viewed below.

Despite taking this positive step to address the Commonwealth’s financial situation, Pennsylvania experienced a credit downgrade. There has been confusion and sensationalism surrounding the downgrade, so I joined other House Republican leaders in issuing the following press release to clarify the situation.

Revenues are Being Collected and Pennsylvania Has Never Defaulted on a Bond Payment, House Leaders Say in Response to Credit Downgrade

HARRISBURG – Responding to the credit downgrade from Standard & Poor’s today, House Republican leaders reminded investors and Pennsylvanians that the Commonwealth has never missed a payment and tax revenues are continuously being collected. The leaders also suggested the downgrade could help bring lawmakers together in the effort to address major cost-drivers in the state budget.

Standard & Poor’s previous credit rating was AA-, meaning, according to the corporate website, Pennsylvania had a “very strong capacity to meet financial obligations.” The current downgrade brought the state rating to “A+,” meaning the state has a “strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.”

The following is a joint statement from the Majority Leader Dave Reed (R-Indiana); Republican Whip Bryan Cutler (R-Lancaster); Appropriations Committee Chairman Stan Saylor (R-York); Republican Policy Committee Chairman Kerry Benninghoff (R-Centre and Mifflin); Caucus Chairman Marcy Toepel (R-Montgomery County); Caucus Administrator Kurt Masser (R-Columbia, Montour and Northumberland); Caucus Secretary Donna Oberlander (R-Armstrong, Clarion and Forest) and the Speaker of the House Mike Turzai (R-Allegheny) issued the following statement:

“Pennsylvanians are paying taxes and it is very disappointing Commonwealth budget costs will increase thanks to a small group of unknown people at Standard & Poor’s who make decisions based on interviews with a governor and press releases from the state’s fiscal officers.

“When those in charge of the checkbook – the same fiscal officers who approved the deficit spending last fiscal year – very publicly refuse to pay bills, even as bank accounts hold billions, of course our credit rating will take a hit.

“This rating agency for years cited the public pension system as a top reason for concern, and this year a bipartisan pension reform plan passed the legislature and is now law – a plan that is fully actuarially sound and will save the Commonwealth billions over the next 30 years.

“Understanding this downgrade is not good news, our members believe we should use it as a wake-up call to deal with major budgetary cost-drivers facing our government.

“While pension reform has become law, we now need to focus on tackling growing entitlement programs and corrections costs. To end growth that appears to be on autopilot, the House earlier this year passed Medicaid and welfare reform to rein in growth, and recent actions in corrections are beginning to take hold, yet more needs to be done. We are committed to doing all we can to ensure the state’s fiscal solvency.

“As the Senate still has the option to concur in the House-passed Fiscal Code, the House, Senate and administration are working together to finalize the necessary components needed to support this year’s budget. In light of the downgrade, we believe it would be beneficial for quick agreement and concurrence in special fund transfers to help the treasurer expedite cash flow while we work on the remainder of the budget-related bills.”

Other State Budget Resources
Pennsylvania Treasury website.

As the state budget process continues to develop, more information will become available to everyone. Commonwealth citizens can look to this webpage for updates as we work to find a financial solution that can be supported by the House, Senate and governor.