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Politics & Government

Budget Report Creates Another Source of Tension in Gubernatorial Transition

A mid-year progress report on the state's budget outlook is giving the outgoing Gov. Tom Corbett and incoming Governor-elect Tom Wolf a chance to put each other on notice, becoming the latest chapter in what's becoming a rocky gubernatorial transition.

With his legally mandated mid-year budget report Wednesday, Budget Secretary Charles Zogby confirmed what independent agencies have said for months: Next year's budget situation will be tough, due to rising mandated costs, weak revenues, and the amount of one-time funding sources used to balance this year's spending plan.

"It's sort of like Groundhog Day in these budget presentations, for me — it's the same old story of growth and mandated cost," said Zogby.

As he spoke, Senate Democrats stood at the ready to denounce the Corbett administration's budget legacy, and Wolf's staff prepared for a press conference later that afternoon on the sorry state of the budget.

The bare cash reserves and the nearly $2 billion "planning deficit" for the next fiscal year should come as no surprise, Zogby said.

"There's this sort of shock that there's gaming at the casino attitude out there," he said.

A few hours later, Wolf addressed reporters, underscoring the state's dismal financial picture and what he sees as Corbett's role in it.

"I think we actually have a failed ideology here," Wolf said. "I do not want to go into this with anybody being under the misapprehension that somehow I caused this. I am inheriting a problem."

It wasn't the first time tensions between the Corbett administration and Wolf transition team were laid bare. The two staffs have sniped back and forth over the implementation of Corbett's HealthyPA program over the full Medicaid expansion supported by Wolf.

Wolf said he thinks the structural deficit next fiscal year could grow larger as more information comes to light, such as lagging revenue collections. When asked for possible solutions to the state's budget problems, Wolf said he wasn't ready to roll out any proposals.

Zogby offered a mixed defense of the Corbett administration's budget decisions. He spoke up for using one-time revenue sources in a pinch to balance the budget. Such a move was necessary, Zogby said, to avoid raising taxes. But his comments weren't exactly a ringing endorsement for the governor's no-tax pledge.

"I would have loved to have had sizable revenue options to make all of this go away," he said. "I didn't have the benefit of that."

Zogby added that a debate on raising taxes "needs to occur, frankly," between the incoming administration and the General Assembly.

"We're in an environment," Zogby said, "where we've hit the wall in terms of what people in this building are willing to cut ... folks are in for a reality check."