Uri Monson: The cost of Pennsylvania's budget impasse
As we reach 100 days without a state budget, it bears repeating that the single most important function of the governor and the General Assembly is to set the spending priorities for the Commonwealth.
All policy ultimately flows from the fiscal decisions that will be made by Pennsylvania's elected leadership. At the same time, one has to question their ability to make such decisions when they seem blissfully unaware of the myriad impacts of their inaction.
Counties around the Commonwealth are being forced to choose between fronting funds for thousands of human service providers, or risk leaving the most vulnerable populations – seniors, children, and the developmentally disabled – without any support. Montgomery County is already owed over $20 million by the State. Counties that cannot, or will not, front these funds are watching local nonprofit human service providers choose between taking on extreme levels of debt in order to keep their doors open; furloughing employees; or in some cases simply closing their doors.
Education in Pennsylvania is also taking a beating. School districts are taking on massive levels of debt, employees are going without pay, and students do not have text books. Community colleges and state institutions of higher education are juggling cash flow while awaiting promised state funds that have yet to materialize. Like many of the human service providers mentioned above, these institutions will take on excess debt, incur significant interest costs, and not one penny of those extra costs will be covered by those actually responsible.
The state itself had already been subject to lowered bond ratings and higher borrowing costs due to growing structural budget deficits and large pension liabilities. The inability to take basic fiscal action only increases the doubts investors have about Pennsylvania and increases future costs. Delays in dealing with structural budget deficits make solutions more painful as a year's worth of spending cuts or revenue enhancements will be forced into half a year, requiring double the impact to receive the same result. Long-term fiscal challenges such as pensions continue to see multi-billion dollar deficits grow as the implementation of potential solutions are delayed.
Throughout it all, the governor's executive team, the General Assembly and their staffs, and all involved with the budget process continue to get paid. For those who advocate for government and government contracts to utilize performance based payment structures it is the ultimate insult – literally payment for non-performance.
Unfortunately all of these impacts are shrugged at in Harrisburg, and the rest of us cannot afford to wait until the next election to be heard. If our most vulnerable populations and basic education can't get their attention, maybe the time has come to try other approaches:
• While Human Services funding is the current unfunded mandate resulting from the budget impasse, the long term unfairness for counties is the failure to fund the court system. Despite numerous court rulings that the State has the obligation to fund and manage the courts, the state has refused to pay. Instead of furloughing Human Service employees as some counties have considered, perhaps they should begin by furloughing or laying-off court-related employees. It is sad but true that a non-functioning court system might get notice where safety nets for at-risk and abused children and seniors do not.
• The private sector has much to lose from a state which cannot function to the point that it increases the overall fiscal burden of its residents. Chambers of Commerce across the state could advocate for, and enable, businesses to put their sales tax collections into escrow rather than remitting them to the state. Failure to receive $750 million a month in revenues might cause someone to sit up and take notice.
• Perhaps with the permission of employees, state income taxes from paychecks could also find their way into escrow accounts rather than be turned over to the state. More than $1 billion a month deferred from state coffers would make it tougher to fund Harrisburg salaries.
• In a similar vein, funds collected by local governments on behalf of the state, including various court fees, deed recording fees, etc., could all be held in escrow pending a budget resolution.
• Dis-invite state elected officials from attending ribbon cuttings, public events, etc. Their time would be better spent hammering out a budget than getting their picture in the local paper or shaking hands in the community.
I am confident that others could come up with even more powerful ways to make an impression on Harrisburg, and I welcome you sending them to me or writing them in the comments section. Regardless of the approach, the message needs to be clear that 100 days (and counting) is far too long to not do one's job.