The Independent Fiscal Office (IFO), created by the General Assembly in 2010 to give the legislature a separate tool for State Budget analysis, released a report that said PA is in for hard times (http://www.ifo.state.pa.us/Releases.cfm).
IFO said that the fiscal year State Budget beginning July 1, 2015 could not utilize the $619 million one-time devices and $572 in non-recurring revenues used by the Corbett Administration to balance this year’s budget and so will be $1.85 billion in the red for FY 2015-16.
Part of that analysis included an IFO prediction that PA would have $171 million less than expected this fiscal year — and that figure may be questioned given better than estimated revenue numbers reported for October and November — $109 million more than anticipated for this fiscal year.
IFO, the Corbett Administration and the incoming Wolf Administration agree that the Commonwealth will be challenged but there is significant disagreement as to the causes and obviously whether or not the Corbett Administration got Pennsylvania out of a Rendell fiscal hole or into a new one.
The Governor’s Budget Office’s December 3 briefing recognized the fiscal shortfall. Budget Secretary Charles Zogby said that “we’ve faced these sorts of deficits every year in this administration” and they are due to mandated costs exceeding revenues. For the 2015-16 Fiscal Year, Zogby said that there would be spending increases in debt service (interest), corrections, pensions, and in the Department of Human Services (formerly Department of Public Welfare).
Governor-elect Wolf’s transition team issued a statement December 2 which said:
- The FY 2014-15 Budget was built on one-time revenue sources
- Prediction: PA will be cash-flow negative from January-March 2015.
- The state has maxed its line of credit
- PA is 50th in the nation in job creation.