February is the official start of the Pennsylvania budget process. In the first week of the month, the Governor has the opportunity to outline his budget priorities in an address made to a joint session of the General Assembly. Later in the month, the House and Senate Appropriations committees hold hearings with each state department to hear their budget requests. By the end of Spring, the General Assembly synthesizes all of these requests and, ideally, passes their own final version of the budget by June 30.
This is going to be a difficult budgeting year and the state will undoubtedly have to make difficult decisions. The state’s Independent Fiscal Office (IFO) estimates that the deficit will be $1.7 billion next fiscal year and $3 billion by 2021-22; this bad news is coupled with lower revenue numbers than were previously estimated.
Before the sausage-making adventure begins, I want to urge the Governor and the General Assembly to put Pennsylvania families first as they seek to balance the budget and fund core services. We have seen too many one-time revenue gimmicks in recent years that just don’t add up.
The Pennsylvania AFL-CIO has joined forces with the state’s public sector unions to form the CLEAR Coalition, and together we’ve found more than $2.5 billion in savings, efficiencies and revenue enhancements that we think will ease some of the state’s fiscal problems.
The state could right-size the management to worker ratio, reform the process of state contracts, monitor and enforce Medicaid fraud committed by providers, and end giveaways to charter and cyber schools. These are common sense reforms that fall within the Governor’s promise of “Government that Works.”
For revenue enhancements, Pennsylvania is missing out on millions of dollars that could be raised from a severance tax and ensuring that Marcellus shale drillers pay their fair share. We remain the only state with active shale that does not impose an extraction tax on its drillers.
We can close corporate loopholes in lieu of making harmful cuts to health and human service programs.
While there are cuts that should be made and reforms that may produce savings, we cannot stray from the essential services of state government.
Public, K-12 education has been underfunded for years; Pennsylvania ranks in the bottom five states in its share of funding basic education. We’ve lagged behind in state share for so long that reports estimate our schools need an additional $3 billion more than we currently give them. The state increase would also ease the burden of homeowners who see their property taxes increase every year to make up the difference.
Even if a student completes K-12 education, getting a college degree from the state is no bargain. The cost of higher education is on the rise and attending even a public university is out of reach for most lower and middle-class families without burdening students with a decade worth of debt.
Political realities make the likelihood of a broad-based revenue enhancement like an increase in the personal income tax or the sales tax highly unlikely, but year after year of austere budgeting has left middle-class families hurting. These families need a raise.
An increase to the state minimum wage is overdue. Moving the wage up to $10.10 per hour immediately, with an eventual increase to $15 (as many other states have done) would give 1.2 million Pennsylvanians a desperately needed raise.
The vast majority (90 percent) are adults over the age of 20, and 60 percent of them are women. An increase in their wages would help families immensely while driving up the wages of all working Pennsylvanians.
As we put more money into the pockets of Pennsylvanians, they’re going to spend it. That means businesses will have to hire more employees to keep up with more families dining out, going to the movies and shopping retail. The higher spending would create enough work to generate 6,000 new jobs.
This is an important budgeting year; the middle class can’t sustain another year of cuts without meaningful reforms, investments to the services they need, or a raise in their wages. The Governor and General Assembly must use the 2017-18 fiscal year budget to show Pennsylvanians that their concerns have been heard.
Rick Bloomingdale is the President of the Pennsylvania AFL-CIO.