Pennsylvania was filled with cash and I could see the surplus flowing out.analysis

Justin Switzer

Despite record inflation and economic challenges brought about by COVID-19, Pennsylvania is in good financial position thanks to higher-than-expected income and federal coronavirus dollar nest eggs-and Tom Wolf. The governor wants you to know it.

As Wolf’s tenure is nearing its end, his office regularly advertises state revenues, exceeding expectations throughout 2022. In a recent interview with City & State, Wolff said he would be the first governor since Dick Thornburgh in 1987. He gives the surplus of the budget to his successor. The state added that he still had enough money to increase funding for education before he resigned.

Republicans will soon argue that they have evaded Wolf’s efforts to raise taxes, but praising Wolf for helping the state regain its finances, the state has funded the Rainy Day Fund and his During his tenure, he pointed out that he had enacted an increase in educational funds.

“The cupboard was bare. We weren’t paying, and we were robbing it from things that the state should never have robbed, like education. We haven’t, and we can afford to do more than we do, “Wolf said.

by Pennsylvania TreasuryThe state has more than $ 2.8 billion in the Budget Stabilization Reserve Fund, more commonly known as the Rainy Day Fund. Mr Wolf said he had no plans to transfer funds from the fund.

Wolf management Announced in early May To date, the state has collected $ 40.7 billion in general endowments, which is $ 4.5 billion higher than the estimate. The Wolf administration said the state still had a budget surplus of $ 3.3 billion, even if the proposed budget was fully approved.

Republicans were reluctant to agree to Wolf’s budget demands.In his 2022 Execution budget planWolff is asking state legislators to increase their basic education funding by $ 1.25 billion and the state’s level-up initiative by $ 300 million. Mr Wolf said budget reserves could be paid for these increases and more.

“It’s a really important message because I don’t want to raise taxes. I want to cut taxes. I want to help people,” the governor added. “We can do that by actually investing and making sure that the school is doing well, that there is an opportunity, and that the road is not causing any kind of problem with the car’s suspension system. We have the money to do that, and it’s really important, so we can do all these things. “

But as consumers tackle inflationary highs, Republicans who rule Congress believe the state should take a cautious approach to spending surplus money and federal bailouts.

Jason Gottesman, a spokesman for the House Republican rally, said earlier this month that the U.S. economy was First quarter contraction “Care must be taken when formulating a financially responsible spending plan,” he stressed.

“Carefully allocate the benefits of surplus dollars and remaining federal funds to alleviate the revenue shortages associated with the impending recession, especially if the federal government no longer has the artificial means to support the economy. I need to, “he said in a statement. “We are taxpayer dollar trustees, and Pennsylvanians rely on us to spend their money wisely and for their benefit.”

More money, more problems?Pennsylvania tax collection surged in March | Monday morning coffee

A New report from Volker AllianceA non-profit organization founded by former Federal Reserve Chairman Paul Volcker has used federal relief dollars for recurring expenses, including Pennsylvania. There is a risk of doing it. “

“In particular, the allocation of lump sum payments for revenue substitution can hurt the budget when federal funds are exhausted,” the report said.

According to the state’s mid-term budget presentation from December 2021, the state has spent $ 4.2 billion out of $ 7.3 billion on state and local financial recovery funds. According to the presentation, this will include a $ 3.8 billion remittance to a general fund to support the “government program.”

The vague nature of how the money was spent offended Beverly Bunch, a professor of public policy at Springfield, University of Illinois, who wrote the report.

“I think the main thing that caught our eye in Pennsylvania was the $ 3.8 billion transfer to the General Fund, without disclosure of how it would be used,” Bunch said. rice field. “Part of trying to avoid cliffs is to know what is being used for one-off projects such as capital, what is being used for regular projects, and they. Monitor your regular projects. “

Bill Glasgall, senior director of finance for The Volcker Alliance, told City & State that Wolf wasn’t wrong when painting a rosy picture of federal expenses.

With record tax collection, not spending would be “irresponsible,” Wolf says | Tuesday Coffee

“The sales tax is strong. Gambling earnings are strong. With a lot of cash, the governor is absolutely right. But what the federal reserve is doing now slows the economy and the federal government funds What if there is a shortage? “

The Volcker Alliance report includes planning to avoid the fiscal cliff, identifying other sources of funding available when using COVID-19 funds for recurring expenses, and transparency in how state and local relief funds are used. It highlights various recommendations that state authorities should consider, such as improvements. ..

If the state is overly dependent on the Federal Relief Fund for recurring expenses, the state may face the fiscal cliff and need to decide whether to reduce its programs or find new sources of funding for them. Bunch said.

“The concern is that we need to reduce the program or identify new sources of funding. The best scenario is that revenues continue at the state level, which is an issue,” Bunch said. increase. “But if the coronavirus worsens, or if the economy tightens and income declines or declines, it’s a cliff, and we’re trying to get state officials to avoid it.”

Justin Sweitzer is a reporter for City & State, Pennsylvania. Where this story first appeared..

Pennsylvania was filled with cash and I could see the surplus flowing out.analysis

Source link Pennsylvania was filled with cash and I could see the surplus flowing out.analysis

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