HARRISBURG - The state's top fiscal watchdog broke ranks Thursday with fellow Democrats to say Gov. Corbett was right to favor squirreling away the unexpected revenue flowing into Pennsylvania's coffers rather than using it to lessen the painful cuts proposed in next year's budget.
Auditor General Jack Wagner said he believed it was more prudent to put the money, about a half-billion dollars, into reserve because there were too many "fiscal unknowns" facing the state. They include labor negotiations with state workers' unions - which may not be concluded before the July 1 start of the new fiscal year - and skyrocketing public-employee pension-fund payments due over the next few years.
"I think Gov. Corbett is right to say that the majority of the surplus needs to be kept in reserve for the unknowns going forward," Wagner told reporters Thursday when asked about the budget.
In April and May, the state collected more in revenue than it had anticipated, leading legislators on both sides of the political aisle to push for tapping some of that money to ease the pain of Corbett's budget cuts. The governor has proposed axing more than half the state's funding of state-supported universities and by more than $1 billion for public schools.
Earlier this week, legislative budget analysts said May's revenue collection was about $34 million, or 2 percent, over the official estimate. That helped leave state government with an almost $540 million surplus as it winds down the fiscal year at month's end.
But Wagner said yesterday he wouldn't call the extra money "a surplus," because the state still faces a projected multibillion-dollar deficit next year.
"I think it's very important that the governor and General Assembly keep their eye on the ball and realize that the liabilities this commonwealth is facing dwarf any surplus," he said.
In doing so, Wagner parted company with many in his own party who have aggressively advocated for using the extra money to counter the Republican governor's proposed cuts, which have spurred many school districts to prepare to lay off teachers, eliminate programs, and raise property taxes.
House Democrats, in particular, have been arguing at every turn for finding ways to ease the budget pain. Wagner's assessment Thursday did not change their position.
"The people of Pennsylvania are being deeply hurt by the cuts Gov. Corbett is proposing," said Bill Patton, spokesman for House Minority Leader Frank Dermody (D., Allegheny). "It makes no sense not to use the surplus."
Even some Republican leaders in the state Senate believe some of the unexpected revenue should be tapped. "Revenue collections for May were $34 million over estimates - some surplus dollars need to be used to soften the impact of budget cuts," Senate President Pro Tempore Joe Scarnati (R., Jefferson) wrote Thursday afternoon on Twitter.
Corbett has said he believed the extra cash should be stored for the future or used to pay down debt. He has also said he would not spend more than the $27.3 billion he has proposed for the next year. Republicans who control the House have taken a similar stance.
The legislature returns next week to start budget deliberations in earnest. The deadline for approving a budget for the next fiscal year is June 30.