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Wolf fires salvo over projected $2B deficit for Pennsylvania

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Sidney Davis | Trib Total Media
Pennsylvania Democratic gubernatorial candidate Tom Wolf speaks at a rally in McKeesport's Renziehausen Park during a stop of his Fresh Start Bus Tour on Sunday Oct. 26, 2014.
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Justin Merriman | Tribune-Review
Charles Zogby, Secretary of the Budget in the Office of the Governor, speaks with the Tribune-Review's editorial board on Tuesday, Dec. 4, 2012.

YORK — The state’s projected budget deficit of at least $2 billion is “obscenely high” and built on an “orgy of one-time transfers” that is untenable, Democratic Gov.-elect Tom Wolf said Wednesday.

Pennsylvanians understand it’s a crisis, Wolf said at a news conference in his hometown, adding he won’t know the full scope of the problem until he takes office.

A 5 percent tax on natural gas drilling that he advocated during his campaign would help but would be only part of the solution, Wolf said. A gas extraction tax would bring in $700 million to $1 billion, depending on gas prices, and Wolf would want to dedicate a portion to bolster public education.

“Gov.-elect Wolf will be inheriting a serious mess,” said Montgomery County Commission Chairman Josh Shapiro, a former state House member who is vice chair of Wolf’s deficit task force.

Shapiro said Wolf is confronted with a fiscal situation that is worse than the deficit Republican Gov. Tom Corbett said he inherited in January 2011 from former Democratic Gov. Ed Rendell. Wolf, Rendell’s former Revenue Department secretary, called the $4.2 billion deficit figure cited by Corbett and his aides “baloney.”

“I’m not sure where the $4 billion figure came from,” Wolf said.

“The facts clearly don’t lie,” said Jay Pagni, Corbett’s spokesman.

The situation is worse now because the state has a $1.5 billion cash flow problem, and its credit is “maxed out,” Shapiro said.

Charles Zogby, Corbett’s budget secretary, told reporters earlier in the day that “folks need to get out of campaign mode and into the governing mode” and avoid taking “cheap shots.”

The deficit that Zogby pinpointed during his midyear briefing should not surprise anyone, Pagni said. Corbett and Zogby have talked about a looming deficit since summer, when lawmakers tapped one-time revenue sources while finalizing the budget.

Zogby said challenges awaiting Wolf and the General Assembly include continued growth in public pension costs and mandated spending for human services.

Some Republicans still blame Wolf’s former boss, Rendell.

“The previous administration spent eight years of smoke-and-mirror budgeting and created a huge structural deficit we are still digging our way out of,” said Stephen Miskin, spokesman for House Republicans. Rendell stopped payments to the pension system to spend in other areas, and used federal stimulus funding for education, Miskin said.

Rendell this year told reporters he left Corbett with a $1 billion surplus.

Some of the back-and-forth on Wednesday was political posturing, said Christopher Borick, a political science professor at Muhlenberg College in Allentown in Lehigh County.

“You want to establish expectations that are reasonable for your administration, and if you are leaving office, you want to leave as positive of a picture as you can,” Borick said. “No one wants to inherit a major fiscal mess, but if your policy positions can alleviate that, it does give you some leverage.”

Lawmakers have “hit a wall” in terms of spending cuts, Zogby said, and a discussion of new revenue would be appropriate — short of major reforms to curb public pension costs and selling state liquor stores.

“Folks are in for a reality check,” he said.

Democrats pummeled Zogby and his boss.

“We said that the budget was badly flawed, and that’s why we were so strongly opposed to the spending plan,” said Senate Democratic Leader Jay Costa of Forest Hills. “The Corbett administration and Republicans in the House and Senate need to acknowledge their role in making Pennsylvania’s fiscal house a shambles.”

House Minority Leader Frank Dermody, D-Oakmont, said Corbett’s tenure as governor has been “a financial disaster for Pennsylvania.”

“On its way out the door, the Corbett administration finally owned up to the structural deficit they created,” Dermody said.

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].

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