Next Year’s Pennsylvania Budget Projected To Have $1B Hole
Pennsylvania is already on track to have a significant budget gap to fill next year.
A study from the Independent Fiscal Office shows lawmakers will likely need to come up with about a billion dollars to keep the books balanced.
They only just finished this year’s budget, four months behind schedule.
It was mostly filled with borrowing, expected revenue from a gambling expansion and a number of internal fund transfers.
Much of the money isn’t recurring, and that’s a big reason why the IFO is predicting the state will have to find more cash next year.
“The reason you see the potential shortfall recurring in the out-years is in part because of the tailing-off of that revenue package,” IFO Deputy Director Mark Ryan said.
If nothing changes, the imbalance is likely to grow to $1.8 billion the year after next, and then to more than $2 billion.
Ryan added, there’s also a more fundamental issue at play.
“We’re really dealing with a base revenue situation in which the underlying revenues don’t grow as fast as our economy,” he said.
The situation isn’t quite as bad as last year, when lawmakers had to contend with shortfalls of more than $2 billion.
The state was able to improve its fiscal prognosis somewhat, Ryan said, by including measures to reduce overall spending in this year’s budget.