Jul 16, 2002 3 min read

If you’re a smoker and bought a pack of cigarettes yesterday then you know already that the state balanced its budget by anticipating that you wouldn’t mind paying a buck a pack in taxes to continue the habit. If you’re like the rest of us you tend to produce refuse daily. Soon you will notice the bill from your garbage hauler increasing to cover the hike in tipping fees at landfills.

The governor and lawmakers turned to these two sources to raise cash to balance the budget. They also tapped into the Rainy Day Fund. While they made it through this crunch, where will they turn next?

The new budget is termed zero-growth because overall it kept spending about the same as the prior fiscal year. However, public schools received an average 3 percent raise in education subsidies. The amount was greater than the governor had proposed at 1 percent, yet smaller than what the schools wanted.

We watched during this recent budget season as all the local districts struggled to develop austere spending plans. School board had to look hard at making program cuts. They are now all in the process of reopening the budgets since the state is sending a little more than anticipated.

The problem, it seems, is solved for this year.

What happens next year? The Rainy Day Fund umbrella will have shrunk from golf-cart to purse size. The one-time hits on tobacco and landfill fees aren’t likely to be duplicated. If the economy remains unchanged, Pennsylvania and its public schools will be in even worse shape next summer.

Pennsylvania’s situation isn’t unique. When the 2001-02 budget was set, the governor and lawmakers projected it would end with a surplus, rather than a $1.3 billion deficit. They worked with the best numbers available then and could not have anticipated the sudden and steep reversal in the economy and its impact on investments. Nor could they have anticipated the events of Sept. 11 and the financial burden to pay for additional law enforcement, security and emergency services.

In its favor, Pennsylvania did recognize during the good years that it might not last and banked a percentage of surpluses in a Rainy Day Fund, which put it in a better position than some states without this cushion. The fund did plug holes this year.

Certainly no one is a fortune teller able to predict with accuracy Pennsylvania’s financial forecast. But barring a major bust or boom, the next governor and General Assembly will be locked in a similar predicament.

Since this is an election year, taxpayers most likely won’t have to wait long to hear what the future budgets might hold. While on the late summer and fall campaign trial, the candidates should enlighten Pennsylvanians with their recipes for ensuring the commonwealth’s economic health.