Associated press

HARRISBURG, Pa. (AP) – Pennsylvania sits on a big budget reserve, a healthy and growing surplus and billions of unspent federal coronavirus relief dollars.

Democratic Gov. Tom Wolf, on the verge of presenting his eighth and final state budget proposal to lawmakers, said Pennsylvania’s accounts made it a “magic year” in “budget surplus territory” that ‘will not demand a tax hike or spending cuts.

“Things are going very well, we had a nice surplus at the end of last year,” Wolf said on Monday, hours after his revenue department announced that the state had collected an additional $ 464 million. than what was expected last month.

Collections for the current fiscal year July through June are now $ 1.5 billion higher than expected, or 7%, largely due to sales, personal income and personal income tax payments. better companies than expected.

The governor’s annual budget speech is scheduled for February 8 and will be followed by weeks of hearings by the appropriations committees in the House and Senate. Normally the showdown between the governor and the legislature over the budget occurs in June, with a stint shortly before or after the start of Pennsylvania’s next fiscal year on July 1.

Negotiators hope this year’s talks don’t end on the wire. On the one hand, they shouldn’t have to wait and see how the last June tax revenues arrive before deciding what they can afford to fund.

“At the top of my list continues to be education,” Wolf said, and he wants the new money to be divided according to a “fair funding” formula designed to distribute state grants equitably.

“I look at the unpaid bills, and I think the unfunded part of the equitable funding formula is, for me, an unpaid bill,” Wolf said.

Wolf’s administration calculates that spending on K-12 education, including special education, as well as preschool and Head Start, increased by $ 1.8 billion during his tenure.

Wolf and Republican leaders both say more money for schools in the 2022-2023 budget is a safe bet.

“Given our cash flow situation, it is likely that we will be open to additional investment in our schools, without a doubt,” said Senate Speaker Pat Browne, R-Lehigh.

Looking ahead, however, Republican and Democratic leaders see a different future for the state.

Browne said he was concerned about rising cost projections and long-term demographic trends that point to an older population with ever-increasing needs for health care and other services.

“Every dollar we decide to spend on other things will make the problem ‘of the year’ worse,” Browne said.

Wolf said Pennsylvania’s comparatively lower cost of living, high-tech sector, and quality colleges and universities point in a positive direction.

“I think we have to be careful to look at how things have been over the past 20 years and say, ‘This is how they always will be,'” said Wolf. “I think Pennsylvania’s demographic future will be different from its past.”

A confluence of factors has left Pennsylvania in the unusual position of having more money than it needs to simply maintain existing programs.

This year’s $ 40 billion state budget included roughly $ 300 million in new spending for public schools, including $ 100 million that Wolf had specifically sought for Pennsylvania’s poorest public schools.

It is keeping in reserve a portion of Pennsylvania’s $ 7.3 billion from the US bailout package signed by President Joe Biden last March, and House Democrats say some $ 2.7 billion in funds from fiscal stimulus have not yet been affected.

The state’s separate rainy day fund – which had effectively become non-existent until a few years ago – now has a balance of more than $ 2.8 billion.

A Democratic budget negotiator says he sees a chance to put the state on a more sustainable fiscal path, help the business sector grow and cope with the state’s changing demographics.

“There is a window here, there are dollars available, there is recurring revenue,” said Rep. Matt Bradford of Montgomery County, the leading Democrat on the House appropriations committee. “It’s my concern, that we miss the opportunity.”

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