Chance of Economic Growth in PA Dim
The state’s nonpartisan economic analysis agency says Pennsylvania’s standing for the next five years isn’t looking particularly good.
Pennsylvania’s agency for nonpartisan economic analysis sees low revenue growth and high deficits in the commonwealth’s future.
The Independent Fiscal Office is projecting just a zero-point-eight percent growth rate in revenue for the next fiscal year.
That’s not good news for any lawmakers hoping they’d have more money to play with during budgeting season.
Erik Arneson, spokesman for the state Senate majority leader, says lawmakers knew crafting the next state spending plan would be no easier than the last two.
“The combination of very limited projected revenue growth and the absolute knowledge that pension costs are spiking makes it a very difficult future in terms of state budgets for the next several years,” said Arneson.
Matthew Knittel, director of the Independent Fiscal Office, says the state’s economic outlook won’t come as a surprise to anyone.
“And the word for the economic forecast is modest. And you will see that word a lot throughout the entire report until my staff got very sick of it and told me to find a new adjective and so I used the word moderate,” Knittel said.
Knittel says over the next several years, the commonwealth will see a growing imbalance between revenue and expenses.
Rising expenditures will be driven by pension and health care costs due to an aging population.
But, he says the possibility of the country going over the fiscal cliff is a big question mark lingering over the report.
Another question not factored into the report is whether the state expands its Medicaid enrollment under the Affordable Care Act.
The I-F-O also predicts if tax law and budget policies stay the same, the state will face a deficit next year of 468 million dollars.
In five years, the deficit is projected to be at two-point-two billion dollars.