If a state has a balanced budget requirement in its constitution, what actual enforcement mechanisms exist to compel the legislature and governor to actually balance the budget? Apparently, there are none.
As the keystone State reaches 2½ months without a state budget, state legislators have finally gotten serious about passing one, and there have been some compromises made. The budget agreement, at $27.9 billion, is larger than what Republicans had pushed, $27.3 billion, and smaller than what Democrats wanted (anywhere from $28.b to 29.1 to 31 billion, depending on which Democrats you ask).
Well, Governor Ed Rendell (D-PA) isn’t the least bit happy with the budget agreement, and has threatened to veto it. THe governor wants more state spending, primarily for education. But the governor has a major point on which he is right :
Rendell said that the plan’s revenue projections – including money from leasing more state land for natural-gas drilling and instituting a tax amnesty – fell far short of his and others’ estimates, and that it would lead to a $1 billion deficit in the next fiscal year, starting in July 2010. He also said it would force more government layoffs, in addition to the 500 already implemented this summer.
Rendell called “ludicrous” the $100 million first-year estimate attributed to increased limits on small games of chance and a tax on the games. He said that with only 1,200 clubs offering small games of chance, he believed the maximum that could be generated was $4 million.
(Senate Majority Leader Dominic )Pileggi (R- Delaware County) said he stood by the plan’s projections as “conservative and well-supported
It’s actually pretty easy to balance the budget, if you aren’t going to be honest in your revenue-side projections.
Now, our good governor wants some major tax increases, something with which the legislature will not agree. The legislators have agreed to some small tax increases:
House Democrats and Senate Republicans joined with Senate Democrats in proposing the budget, which would impose some limited tax increases – such as an additional 25 cents a pack on cigarettes – and authorize table games at slots casinos to raise money to help plug a deficit of more than $1 billion.
Mr Rendell had proposed a 0.5% increase in the state income tax, from 3.07% to 3.57%, but that went nowhere. He’s looking at dropping the state sales tax exclusions for certain items — food and clothing are currently not taxed — because those are big items.
Rendell immediately rejected the budget for not meeting his education-spending requirements.
The House Republican caucus is the only one of the four which currently oppose the plan — but they have enough votes to sustain Governor Rendell’s threatened veto. Given that the House Repubicans want less spending, Mr Rendell might choose, in the end, not to veto the budget, because he’d lose even more.
But it has to be asked: are the legislators using bogus projections to create a larger base of spending than can really be justified? It wouldn’t be the first time legislators have done something like that, and it won’t be the last. Pennsylvania does have a balanced budget requirement, but the only enforcement mechanism is the honor and honesty of the legislators. Perhaps some of them — Democrats and Republicans alike — have a deficit of their own in those areas.
