State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

Pennsylvania Budget Impasse Ends

by on March 23, 2016 3:12 PM

Pennsylvania's nine-month budget impasse will end, as Gov. Tom Wolf said Wednesday he would allow the $6.6 billion spending package passed by the Republican-majority in the Commonwealth's General Assembly to lapse into law without his signature or veto.

The package, which includes no new taxes, completes the state's $30 billion 2015-16 budget, less than four months before a new budget will be due.

"I am going to allow the 2015-2016 budget to become law without my signature," Wolf said. "This will allow for funding to go out to schools and other services in the short term, but we still face enormous problems that this budget does not even pretend to address."

Penn State and other state-related universities will receive a 5 percent increase in state appropriations. Penn State will get a $225 million general appropriation while its College of Agricultural Sciences will receive $50.5 million for agricultural research and extension programs, which rely heavily on state funds to continue operation not only in State College but in each of Pennsylvania's 67 counties.

The ag extension and research programs had become cause for concern in recent weeks. Penn State President Eric Barron said last month that without the appropriation the University would be forced to layoff 1,100 employees across the state and shut down programs, essentially marking a hiatus -- if not an end -- in Penn State's historical relationship to the state as a land-grant university.

The lack of a general appropriation posed threats to education and other programs as well, and Barron said Penn State could have had to consider using tuition funds to cover interest on bridge loans or sell off investments.

“This is obviously quite a relief for Penn State and the students, faculty and staff we serve,” said Penn State President Eric Barron. “State funding plays a critical role in our ability to offer an accessible, world-class education to Pennsylvanians and it also allows us to keep in operation our network of county agricultural extension services and agricultural research. We are grateful that our elected leadership in Harrisburg have reached a positive resolution to a difficult budget process.”

Penn State is among the many institutions and organizations that faced dire circumstances without a state budget. Some already have. Social service agencies have had to lay off staff and some counties and school districts have taken loans to continue operating.

"It certainly isn't something we expected to go all the way to March,but it has been," said Senate Majority Leader Jake Corman, whose 34th District includes Centre County. "By closing out 15-16, that allows us to move forward to 16-17. If the governor is going to allow it to become law, we're grateful and happy about that and will begin to take on some of the challenges in the future." 

Wolf said he would allow the budget to pass in order to begin addressing a looming budget deficit for 2016-17. He said the budget that goes into effect now will make that deficit bigger and create more issues.

"Let’s be clear: the math in this budget does not work," Wolf said. "Next fiscal year -- that already has a $2 billion deficit -- will now begin with an extra $300 million deficit. Ratings agencies and the Independent Fiscal Office have all agreed that we face a massive structural deficit. Left unaddressed, the deficit will force cuts to schools and human services, devastating credit downgrades that will cost taxpayers millions, and increase property taxes for our senior citizens. We must face this reality this year and balance our budget with real, sustainable revenues."

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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