High-ranking Republican Pennsylvania officials sounded off on Wednesday in the state Capitol Building against Governor Josh Shapiro’s budget legislation which would deplete state reserve funds in five years.
Pennsylvania Treasurer Stacy Garrity (R) and House Appropriations Minority Chair Seth Grove (R-York) observed that the scenario is rather sunny insofar as the Democratic governor’s projections don’t account for a potential recession. Shapiro’s calculations also assume government spending won’t surpass 2.36 percent in the next five years, a supposition so rosy it provoked Grove to snicker slightly.
The minority chair recalled making optimistic remarks about the Shapiro budget proposal when the governor unveiled it earlier this year, as it envisioned more modest spending growth than his predecessor Tom Wolf (D), pursued in his eight years in office. But the Republican legislator expressed dissatisfaction with Shapiro’s aversion to trimming his $45.8-billion proposal to limit its future impact, which would force the state to secure an additional $2 billion in annual revenue.
“Spending our Rainy Day Fund and budgetary reserves is a major concern for House Republicans,” Grove said.
Democrats passed the spending plan out of the House Appropriations Committee by a 22-15 vote with no GOP support on May 22. But Grove encouraged Democratic lawmakers to resist rubber-stamping their chief executive’s fiscal agenda, insisting that both Republicans and Democrats across the state desire more conservative economic governance. He cited the 67 percent of Philadelphia primary voters who supported amending the commonwealth’s Home Rule Charter to require a minimum yearly funding allocation to the state’s Budget Stabilization Reserve, commonly known as the Rainy Day Fund.
“If Philadelphia can do this, we can all do this…,” Grove said. “The average citizen knows the importance of saving and the benefits it can bring. It’s the same thing for our commonwealth’s financial health.”
Garrity stressed that a more modest budget should include a substantial allotment to the Rainy Day Fund in the next fiscal year. The commonwealth uses the special account as a cushion against tax rises or undesired program cuts when recessions deprive the Keystone State of revenue.
“There is bipartisan agreement that Pennsylvania will soon face a fiscal cliff, and we owe it to the hard-working taxpayers we serve every day to prepare by making prudent and fiscally responsible decisions,” she said. “One of the best decisions we can make with this budget is to save more in our Rainy Day Fund. As treasurer, I’ve consistently encouraged the General Assembly and the governor to focus on the long term impact of their budget decisions.”
Over Garrity’s two and a half years as the state’s top financial administrator, the Rainy Day Fund’s balance grew from $240 million to a record high of more than $5.1 billion. That means the account could now be tapped to run the state for 42 days versus just a few hours when the fund was low. The treasurer ascribed that progress to sound fiscal decisions made by Republicans who run the state Senate and controlled the House until Democrats won a majority of seats last November.
Still, Garrity noted, the commonwealth continues to lag slightly behind the national median when amassing budget stabilization dollars. Yet catching up shouldn’t be too difficult, she added, insofar as high-interest rates and the state’s nearly $7-billion budget balance lead her agency to expect $437 million in investment income over FY 2023-24, a sum roughly $432 million larger than what was forecast a year ago.
“I urge the General Assembly and the governor to allocate the unanticipated revenue to the Rainy Day Fund,” she said. “Depositing all $432 million would lift us to slightly above the national median…. We expect hard-working Pennsylvanians to be responsible for their own finances and to save for a rainy day; the state must continue to do the same.”
A Shapiro spokesperson could not be reached for comment.
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Bradley Vasoli is managing editor of The Pennsylvania Daily Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
Photo “Josh Shapiro” by Governor of Pennsylvania.
