Pa. GOP leaders trumpet soaring state revenue, caution against spending

Legislative Republicans on Wednesday took a victory lap over a bustling state economy, giving credit to President Donald Trump’s tax cuts, while cautioning against spending the newfound windfall.

“Responsible budgeting decisions are not just spending decisions, it’s revenue decisions,” Senate Appropriations Chair Pat Browne, R-Lehigh, said during a celebratory Capitol news conference, referring to the GOP’s rejection of tax increase requests from Democratic Gov. Tom Wolf.

Driven by higher corporate tax revenue, Pennsylvania’s coffers swelled by $828 million after a strong April brought in $4.4 billion, or $464.7 million more than projected by the Department of Revenue. April’s general fund revenues were up nearly 12 percent over expectations, while yearly revenues are up 3 percent.

Compared to the same period last year, the state has collected $1.8 billion more in tax revenue — a nearly 7 percent increase.

The $828 million isn’t entirely uncommitted. At least half, about $400 million, will be needed to pay off a final piece of last year’s budget.

Still, the prospect of extra money led Republicans to preempt calls to spend the surplus.

“There’s going to be a lot of talk about spending money,” House Appropriations Chair Stan Saylor, R-York, said. “Anytime you have money, everybody wants to spend money. We need to be cautious about that.”

Instead, Republicans said the surplus should be put into the state’s oft-empty rainy day fund, which saw a $22 million deposit last year, the first major investment in years. That is enough money to cover just a few hours of commonwealth operations.

Republican leaders also said they still plan to try to keep spending below Wolf’s proposed $34.1 billion budget.

Rep. Matt Bradford, the ranking Democrat on the House Appropriations Committee, said he agrees that the Legislature should be “cognizant that today’s good day could be followed by tomorrow’s rainy day.”

But seeing long-term deferred needs in, for example, education and infrastructure, Bradford thinks lawmakers need to consider spending new money in the next budget. 

And considering some of the Legislature’s previous techniques to cover deficits — like shifting costs to the next year or borrowing off the state’s tobacco lawsuit settlement — Bradford, of Montgomery County, said that using the overflow might just be considered Pennsylvania living within its means.