Collapse or Growth – What’s at Stake in Next Wednesday’s Revenue Vote

Stephen Herzenberg |

Pennsylvania does not bring in enough revenue through current taxes and other fees to support budgets that adequately fund education and programs that improve the lives of thousands of our fellow Pennsylvanians. That is the reality that is captured by the term “structural deficit.” It is the situation that has led Wall Street to downgrade the commonwealth’s credit-worthiness five times in the last three years.

Gov. Wolf has proposed a package of solutions to remedy this unsustainable situation—increases in the personal income tax, the sales tax and a new tax on gas drilling. The new revenue would increase funding for public education and programs that help the elderly, disabled, abused, and addicted. In addition, some of the new revenue would be returned to taxpayers in the form of reduced property taxes. And some of it would fill the holes in the state budget so that there is enough money to pay the bills – this year and in future years.

News reports indicate that there will be a vote in the state House next Wednesday on a modified version of the governor’s revenue proposals.

There is a lot more at stake in that vote than “just” this year’s budget. If the House rejects the governor’s plan to put an adequate yearly stream of revenue into state coffers, the budget next year will fall off the cliff. We know this because the Republican budget vetoed by Gov. Wolf—which had one-time but no recurring revenue sources—would have ballooned the state’s structural deficit to $3.1 billion in 2016-17. As a result, in a mere nine months, on July 1, 2016, the budget will simply collapse and to balance the state books will require radical action, such as $1 billion cuts EACH to education funding and the Department of Human Services.

The last $1 billion cut to public education funding put 33,000 teachers, guidance counselors, school nurses, coaches, and other education workers on the street. Schools shed music, art, language, and sports programs. The last cuts to human service programs left people who desperately need treatment for mental illness or addiction or a safe place to escape an abuser on waiting lists or unable to get any help altogether. The drag of these devastating cuts slowed down the private-sector economy and made Pennsylvania 48th in job growth under Gov. Corbett.

That’s what is at stake in next Wednesday’s vote. Either House members vote for revenues that will begin to restore educational opportunity—and pay the bills—or they allow the state budget to collapse on the backs of school children and our most vulnerable citizens.