Budget Secretary Charles Zogby told a Pennsylvania Press Club luncheon today, "All the one-time means, all the gimmicks have been utilized. We've kicked the can down the road long enough. The day of reckoning has arrived."
Secretary Zogby said the fiscal challenge facing Pennsylvania was unprecedented and the state faces a $4 billion budget deficit.
$2.6 billion in federal stimulus funds were received by the state for Medical Assistance, basic and higher education, Corrections and human services that will not be available in the coming year.
Other one-time revenues sources totaling $750 million will also not be available, pointing out budget maneuvers like taking Tobacco Settlement Fund monies and giving it to the State Employees Retirement Fund will also not be available.
Secretary Zogby refused to comment on funding specific programs, deferring those questions to Gov. Corbett's budget message next week. But said every line item is being considered for cuts.
He did comment on several issues--
Broadening The Tax Base: The challenge of no new taxes or fees laid down by Gov. Corbett was one he accepted on becoming Budget Secretary. He said Pennsylvania is not in this situation because taxpayers paid too little. The problem is expenditures are outpacing revenue growth.
Privatizing Liquor Stores: It needs to be looked at in terms of what is an appropriate role for State Government, but it will not help solve the General Fund's deficit problem. He noted there are revenues due to the state from the current system that cannot be lost.
Medical Assistance: He recognized this as a growth area, but said one way to control costs is to make sure people receiving benefits are actually eligible.
Pensions: He said Gov. Corbett believes contract obligations must be met and that include pensions for state employees.
Natural Gas Royalties: He said most people do not realize the amount of revenues that come from Marcellus Shale drilling saying workers and businesses hired by the industry are producing local and state tax dollars.
Combining DEP/DCNR: He said there are no plans to combine the agencies. The Governor is trying to find the right person to fill the job of Secretary of DCNR.
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