Pennsylvania’s Budget Surplus Sparks Debate Over Fiscal Priorities

Pennsylvania Governor Josh Shapiro wants to spend the state’s $14 billion surplus on transit, education, and economic development which sparked debate about the state’s structural deficits, spending, and savings.

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Pennsylvania’s Continuing Budget Challenges

Pennsylvania, despite accumulating a surplus of $14 billion over four years remained in structural deficit. In an article from TribLive, the budget challenge is due to the imbalance between the state’s annual expenses and tax revenue. Because of its constitution, it cannot depend on borrowing to cover its operating expenses.

According to the report, the state is already using accounting gimmicks, delayed payments, and underfunding essential programs to navigate its financial challenges but these can only work short-term and can only worsen the imbalance. Moreover, forecasts indicate that Pennsylvania will be in deficit because its revenue cannot match its expenses in the coming years.

With these challenges, its policymakers have different opinions on how to approach the deficit. Republicans advocate for spending cuts in social assistance programs and Democrats recommend investing in education and workforce development.

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Governor Shapiro’s Budget Proposal for Pennsylvania

Governor Josh Shapiro wants to allocate $3.5 billion of Pennsylvania’s budget surplus. He plans to use it on transit systems, education reforms, and economic development programs. Though the state can afford it, concerns about the state’s structural deficit arise.

Governor Shapiro proposes to use the surplus funds in communities rather than keeping it in some bank account. Also, he did not call for a tax increase but promoted corporate tax cuts. According to his budget address, it’s not a badge of honor to take more money from the people of Pennsylvania and then brag about keeping it in some bank account in the capitol.

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