After Years Of Stubborn Deficits, PA’s Budget Process Looks Easier

May 3, 2018

It’s almost time for lawmakers to start work on the state budget.

But after several cycles of tortuous negotiations made more difficult by persistent revenue shortfalls, it looks like this year might be smoother sailing.

Thanks to last year’s weak revenue collections, lawmakers were faced with a nearly $1.5 billion hole.

They finally filled it through—mostly—borrowing. But it took until late October, three months past the deadline.

This year, the shortfall is much smaller.

A recent report from the Independent Fiscal Office has spending coming in about $250 million over projected revenue—though a number of factors, including tax refunds, could shift that.

IFO Director Matthew Knittel said it’s great outlook—though he did offer one note of caution.

“The main cause for concern is it has been so long since the last recession, and what happens if we hit one?” he asked. “It has been almost ten years now.”

The shortfall this year is mainly due to lawmakers trying to take $200 million from the Joint Underwriting Association—a state-created insurer that sued, claiming the state has no right to its funds.