Pennsylvania State Rep. Frank Ryan (R-Lebanon) recently predicted that Pennsylvania’s poor fiscal outlook will lead to higher taxes and reduced services unless the state takes “drastic measures” to improve its finances.
Ryan highlighted a new Independent Fiscal Office (IFO) report on the state’s budget and economic outlook as evidence and discussed his financial rescue plan as a potential solution.
According to the report, updated revenue and expenditure estimates suggest the state could face a potential budget imbalance of up to $1.71 billion in the upcoming fiscal year. The potential shortfall falls to $1.58 billion in FY 2023-24 based on current policies. The IFO report predicts that in future years, higher health and human service program costs, pension obligations and ObamaCare’s unfunded Medicaid expansion mandate will contribute to the state’s budget deficit.
While the report doesn’t assume that a recession will occur over the five-year budget window, it does caution about the economic and revenue implications of a recession. It also notes that a recent survey by The Wall Street Journal indicates that most economists expect that a recession is more likely than not to occur over the next three years.
“As a financial professional whose job it was to rescue businesses from bankruptcy and insolvency, and as a military commander, I don’t make predictions casually,” Rep. Ryan said. “But I can assure voters and taxpayers that this report from the IFO will result in proposed tax hikes while residents continue to struggle to pay ever-increasing school property taxes. This is unacceptable.”
Ryan has prepared a legislative solution to Pennsylvania’s financial problems and will present a three-pronged approach to implementing the plan. He is also working on a bill to eliminate property taxes and plans to reintroduce his lean government bill and his auditor general enforcement bill in December.
“It is not enough to present a rescue plan and ask for it to be adopted,” Ryan said. “There must be concrete steps taken at all levels of a business to rescue it from insolvency and government is no different. Therefore we must have financial oversight with actual power to bring about change, we must be specific about where we save money and we must unleash our local economies from the boat anchor of archaic property tax laws.”
According to the IFO, younger people are also leaving Pennsylvania and more retirees are moving in. Ryan noted that if this trend is not reversed, it would complicate his plan to eliminate property taxes.
“The clichés are endless, but the sad thing is that they aren’t really clichés – you can’t spend your way out of debt, and sooner or later you do run out of other people’s money, as witnessed by the continued exodus of younger Pennsylvanians moving to other states.” Rep. Ryan said. “The real solution is as time-honored as those phrases – cut spending to pay your bills with the revenue you have.”