What Happens If PA Doesn't Balance Its Books? There's Plenty Of Precedent

Jul 25, 2017

Pennsylvania's one of only four states that still hasn't passed a budget for the fiscal year that ended in June.

However, many states struggled with budgets this year. And according to budget experts, that struggle-related to a weak national economy-manifests itself in short-term budget solutions that have proven to only make states' fiscal issues worse.

Pennsylvania lawmakers passed a $32 billion spending plan nearly a month ago, but remain stuck on how to finish paying for it.

That specific budget scenario isn't too common.

But Liz McNichol, a senior fellow at the Center on Budget and Policy Priorities, a group that tends to side with Democrats on issues like taxation, said it is easy to find precedents for where the situation could lead.

"We are seeing situations where states will make sure that certain parts of their parts of their budget are funded, but they haven't really figured everything out," she said. "They're building in problems. By definition, they're not in good fiscal shape if they don't have long-term, recurring revenues."

Nichol said a prime, cautionary example of a state relying on stopgap solutions is Illinois.

"It's a state that has gone almost three years without really adopting a full budget-just doing bits and pieces. And they have a huge backlog of unpaid bills," she said. "It has consequences, even if you don't actually get a shutdown."

Lawmakers in Pennsylvania have indicated they'll probably fill the roughly $2 billion budget gap largely on one-time sources, like borrowing and fund transfers.