PA’s Budget Shortfall Not Unprecedented, But Still Pretty Bad

Dec 19, 2016

Gov. Tom Wolf looks out a window while visiting Butler County on Nov. 14, 2016.
Credit Gov. Tom Wolf / 90.5 WESA

Pennsylvania’s mid-fiscal year budget report has confirmed what the Independent Fiscal Office has been warning for well over a month: underperforming revenues are putting the commonwealth on track for a shortfall of around $600 million.

So how bad is that?

By all accounts, it’s a tenuous place for the state’s bank account to be. But it’s not without precedent.

Budget Secretary Randy Albright said this year’s financial outlook is at least as bad, if not worse than any he’s seen in his time in state government. But Terry Madonna, pollster and analyst with Franklin and Marshall College, noted the commonwealth is by no means a stranger to being strapped for cash.

“Routinely we had them in the 1960s … in the late 1970s. We had some tough budgets in the early '90s," he said. “So, budget deficits have been commonplace in this state.”

The 2016-17 fiscal year budget hole is also compounded by an even deeper-rooted problem—an existing $1.7 billion structural deficit.

Madonna noted that the combination of the two is a less common situation.

“When you add to that the revenue shortfall in this budget, it poses a very serious challenge,” he said.

Lawmakers have begun floating plans to deal with these financial issues, including restructuring and combining state agencies.

Madonna said that could help, but often doesn’t lead to long-term savings.

Wolf also announced recently he plans to eliminate thousands of unfilled state positions, which could save some money.