Rush to budget judgment in Harrisburg

WHAT a difference a year makes: Last year at this time, the state budget was still 102 days from being passed, and the consequences of the delay weren't pretty.

This year, it looks like lawmakers will pass a state budget close to the June 30 deadline. But the rush to craft a deal could lead to a spending agreement far worse than last year's.

Last year, thousands of state employees went without pay, and social-service agencies struggled to survive while awaiting state funds. However, most of the pain was ultimately temporary. After the Legislature passed a budget, funding was restored in most areas.

This year could be different. Instead of simply delaying funds for important services, the Legislature seems poised to cut them drastically. Lawmakers were already eyeing deep cuts to mental-health services and substance-abuse prevention, workforce training and other critical services to deal with a $1.2 billion deficit. Thanks to delays in Congress, the pressure for more cuts has grown significantly in the last few days.

This is due to the Senate's actions last week, when the GOP successfully blocked a jobs bill that included higher reimbursements for Medicaid, translating into a whopping $850 million more in cuts for Pennsylvania.

The $850 million will have to come almost entirely from the Department of Public Welfare, which could be catastrophic for one of the largest state agencies. Gov. Rendell estimates that he'll have to lay off 20,000 employees. Of course, we're not in favor of simply handing any state department a blank check. We hope that evaporation of the Medicaid funding might push the DPW to operate more efficiently. But we can't help but note that losing $850 million will require state officials to make cuts with a hatchet instead of a scalpel. These cuts will cause a lot of pain, especially when many are already suffering from the bad economy.

But we can't blame the state-budget mess entirely on Congress. Another big obstacle to a fair budget is the unwillingness of the Legislature to consider new taxes. That's outrageous, especially when you consider that the state tax code is littered with loopholes. For example, we still collect no severance tax from natural-gas companies mining the Marcellus shale. Although GOP lawmakers are making noises that they might support some version of a tax, there's still no agreement. And we're also one of the only states that fails to tax cigars and smokeless tobacco. These two proposals alone could raise more than $200 million.

Of course, the lack of creativity doesn't just apply to taxes. Lawmakers refuse to seriously consider measures that could modernize parts of state government. One example would be to sell the state liquor stores, which could raise up to $2 billion.

ALL THESE FACTORS could lead to a state budget that does a great deal of harm. However, instead of trying to find the political will to grapple with these issues, the Legislature is rushing to pass a budget before tomorrow. Why? It's at least partially driven by the coming campaign season, in which more than two-thirds of the Legislature is up for re-election.

Last year's budget delays were annoying and signaled a dysfunctional state government. This year, the rush to a budget signals the same thing.

Now's the time, especially given the crisis

caused by Congress, for lawmakers to take their time and carefully consider how to solve the problem.

For more coverage of the budget, see ourmoneyphilly.com.