Shapiro’s Budgeting Would Lead to Tax Hikes and No Reserve
By State Rep. Mike Cabell (R-Luzerne)
When Gov. Josh Shapiro presented his first state budget proposal in early March, he painted a rosier-than-reality picture of Pennsylvania’s financial future. The $45.8 spending plan for Fiscal Year 2023-24 is nearly 6% higher than the current year and he’s counting on using part of the budget surplus to balance it. Overburdened taxpayers should be worried, as it only gets worse from there.
Over the next five years, Shapiro’s expected spending increases would eliminate this fiscal year’s projected $7.9 billion surplus. If that’s not enough, the governor also wants to balance future spending plans by raiding the $5 billion that’s been deposited in the Rainy Day Fund, which has reached an historic level thanks to frugal budgeting by the House of Representatives in recent years.
In short, the Commonwealth’s nearly $13 billion reserve would disappear if the governor gets his way. However, we believe it to be critical that those funds remain untouched to prepare for the turbulent financial climate many economists are predicting in the not-too-distant future. Doing so would also help to avert the need to raise state taxes during an economic downturn.
Furthermore, the Independent Fiscal Office (IFO) predicts Pennsylvania faces a substantial structural budget deficit, which is when government spending exceeds government revenue. In its “Five-Year Economic and Budget Outlook,” the IFO estimates the structural budget deficit will reach nearly $3 billion by Fiscal Year 2025-26. Such a projection by a reputable and nonpartisan agency is reason for concern and should not be ignored.
As a member of the House Appropriations Committee, which is involved in the annual budget process, we are focused on developing a realistic and balanced spending plan that adequately funds core government services without putting Pennsylvania’s financial future at risk.
Representative Mike Cabell
117th Legislative District
Pennsylvania House of Representatives
Media Contact: Andy Briggs
717-260-6474
abriggs@pahousegop.com
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