Posts Tagged loan
On one point there is unanimous agreement under the capitol dome in Harrisburg: Pennsylvania is in uncharted fiscal waters. Never before in the history of the commonwealth has a state budget impasse lasted this far into the fiscal year. There are no signs of agreement on a pathway forward. And the deadline for next year’s budget is now on the horizon.
Despite all of this there has been little public outcry. Recent polling suggests Governor Tom Wolf’s approval ratings have taken a hit, but the filing deadline for candidates to run for state House and Senate seats came and went in mid-February leaving most lawmakers with no or token challengers. And, for the most part, the machinery of state government chugs onward.
Unlike past periods of budgetary disagreement state workers have continued to be paid throughout this impasse. This as a result of past court rulings that held employees who in fact show up for work and perform their jobs must be paid. As a result, essential – and many non-essential – state services have continued unabated.
Since the state constitution requires passage of a budget before spending can take place you might think state coffers would be overflowing with unspent tax money. You likely have noticed that despite the lack of a budget, state income taxes are being deducted from your paycheck and you continue to pay sales tax on purchases. The state, however, is broke.
The state treasury a couple of months back took out a $2 billion loan supposedly to keep the cash flowing. But, without a budget how can the state spend so much money it actually had to take out a loan to stay in business? The answer is over $37.5 billion has been expended, much of it prior to the partial budget resolution that occurred in January.
This has caught the attention of Republican legislators who point out Governor Wolf does not have the authority for such spending. Worse, what gets paid and what does not get paid is basically happening at the discretion of the Governor. Senate Republican spokeswoman Jennifer Kocher told the Pittsburgh Tribune-Review that Wolf is spending as if he has “an open checkbook.” She pointed out, for example, the governor continues to fund the state corrections system even though he line-item vetoed that portion of the state budget.
The governor’s spending priorities have been controversial. Last Fall the state treasury floated a “loan” to the House Democratic Caucus because they had run out of money to pay staff due to the budget impasse. A couple of months later that same treasury denied the City of Erie School District a loan to keep schools open.
Worse, the Wolf Administration has been less than transparent in making public details of its unauthorized spending. State Representatives Chris Dush (R-Jefferson) and Seth Grove (R-York) have had to file Right to Know requests to obtain information.
All of this has prompted calls for Auditor General Eugene DePasquale to conduct an audit of the state spending that is occurring during the budget impasse. The GOP brought out the heavy artillery to make the request which came from House Appropriations Chairman Bill Adolph (R-Delaware) and Senate Appropriations Chairman Patrick Browne (R-Lehigh). They head the legislative committees vested with budgetary power.
Governor Wolf triggered the ongoing budget battle by requesting, actually demanding, a massive increase in state taxes and spending. Interestingly, the amount of money spent by his administration over the past seven months surpasses the total annual budget passed by the legislature and partially vetoed by the governor. This has given rise to concerns that the governor plans to spend to his preferred level regardless as to whether or not he ever receives legislative approval. That could turn the current fiscal and political crisis into a constitutional crisis.
Much like President Obama at the national level Governor Wolf has made it plain he plans to implement his agenda by whatever means necessary even if it means trampling the constitution. His unchecked and unauthorized spending spree is proof positive he is doing just that.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is email@example.com.)
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