Pennsylvania lawmakers aim to fill virus-inflicted deficit

November 17, 2020 GMT

HARRISBURG, Pa. (AP) — Pennsylvania’s state Legislature is working this week to assemble a spending plan to carry state government through the rest of the fiscal year and fill, at least for the moment, a multibillion-dollar deficit brought on by the economic impact of the coronavirus.

Closed-door talks were not expected to produce a draft of final budget legislation before Wednesday, with final votes possible on Thursday, House Appropriations Committee officials said.

Gov. Tom Wolf, a Democrat, has asked the Republican-controlled Legislature for another nearly $10 billion in spending to round out the fiscal year, after lawmakers approved a piecemeal, no-new-taxes $25.8 billion budget in May.


Wolf’s administration said Tuesday that it is continuing to seek federal budget aid, after last spring’s coronavirus relief bill — called the Cares Act — prevented states from using the money to cover for drop-offs in tax collections.

“Additional federal aid, along with critical flexibilities that were not included in the Cares Act, are a top priority to allow states and local governments to backfill massive budget deficits,” Wolf’s office said in a statement.

State lawmakers say they are not considering any tax increases to underwrite the new spending. Nov. 30 is the last day of their two-year session and their most immediate deadline to act.

Last year’s approved spending plan was a $34 billion budget. Public schools, universities and many programs and state agencies will have to get by without an increase, while budgetmakers say the state still has rising costs for prisons, unionized state employee paychecks and medical care for the poor, elderly and disabled.

That may mean continued moves to scrounge cash, including hiring freezes, postponing new vendor contracts and delaying big payments, such as to Medicaid providers.

There has been some good news, after initial projections in the summer of a $6 billion deficit. Revenue collections have exceeded expectations, prompting the Wolf administration to raise its full-year revenue projection by $2 billion, administration officials said.

In addition, the federal government has continued to cover a higher proportion of Medicaid costs during the pandemic, lessening the demand on the state treasury.


To help paper over the rest of the gap, Republicans are aiming to use much of the state’s $1.3 billion left over from Congress’ coronavirus relief package for state governments.

The money would largely be used to cover the salaries of frontline employees, such as state police troopers, Department of Health personnel and state prison staff. About $200 million of the aid could be used to backfill property tax-reduction payments to school districts after casino revenues — which normally fund the payments — took a dive during coronavirus shutdowns.

Democrats had hoped to use the federal coronavirus relief dollars to provide hazard pay to frontline workers and aid universities, hospitals that serve large Medicaid populations, restaurants, child care centers and other businesses and institutions that are suffering during the pandemic.

Wolf and Democratic lawmakers say are pushing for a new round of federal aid to help address those needs.

The state could also tap about $340 million in a reserve account, while Republicans want to siphon money from some off-budget programs, such as environmental cleanup funds or low-interest loan programs for capital projects and purchases.


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