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Pennsylvania Gov.-elect Wolf to inherit shortfall of $1.85B | TribLIVE.com
Pennsylvania

Pennsylvania Gov.-elect Wolf to inherit shortfall of $1.85B

Tribune-Review
| Friday, November 14, 2014 12:01 a.m

HARRISBURG — Democratic Gov.-elect Tom Wolf steps into office in January confronted with the same problem that Republican Gov. Tom Corbett had in 2011: a multibillion-dollar deficit left by his predecessor.

The Independent Fiscal Office on Thursday projected a $1.85 billion budget shortfall for 2015. That’s “bad news for Pennsylvania, but the depth of the financial hole left by the Corbett administration is still not known,” Wolf said in a statement.

There would be no looming fiscal issue if lawmakers had enacted Corbett’s proposals for new revenue and savings — selling the state liquor stores and reforming the public pension system, said Jay Pagni, Corbett’s spokesman.

Corbett “inherited a $4.2 billion deficit” and pushed through four budgets with fiscal discipline and no tax increase, he said.

“I am disturbed but not surprised to learn that Pennsylvania has a growing budget deficit, estimated by the Independent Fiscal Office as being nearly $2 billion,” said Sen. Vincent Hughes of Philadelphia, ranking Democrat on the Senate Appropriations Committee. “This is a direct result of the irresponsible fiscal policies pursued by the Corbett administration.”

Corbett in 2010 campaigned on fiscal austerity. He inherited a huge deficit, his budget office said, from former Gov. Ed Rendell, a Philadelphia Democrat. Much of it stemmed from the loss of federal stimulus money that Rendell used to prop up state spending. Republicans blamed excessive spending by Democrats.

“As bad as today’s news is, what lies ahead could be worse,” Wolf said.

Wolf urged the parties to work together, saying he’ll need cooperation since Republicans control the House and Senate, and therefore two-thirds of any solution.

The 2014-15 budget included $619 million in one-time savings and $332 million in shifted funding, which exacerbated the structural imbalance next year, the fiscal office said. Slow erosion of the tax base and “normal” growth in expenditures drove much of that imbalance, the report said.

With a growing population of senior citizens, average incomes shrink and government costs increase, said Steve Miskin, House Republican spokesman.

Missed opportunities include privatizing the state stores, which would have yielded more than $1 billion, Miskin said.

The House approved a liquor reform plan that died in the Senate.

Wolf opposes selling the state stores.

“Mr. Hughes and his colleagues refused to even discuss the issue of pension reform,” Miskin added.

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or bbumsted@tribweb.com.

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