Fiscal Year 2017-2018 Pennsylvania State Budget Update

State and Local Tax

By Allen Wassel

It appears that Pennsylvania Governor Tom Wolf and state legislators have come to a tentative agreement on the spending plan for the 2017-2018 fiscal year.

The approximately $32 billion budget currently includes no broad-based tax increases, but the Governor has indicated that he is not inclined to sign the budget without some plan in place to address taxes and revenues in the very near future.

Revenues fell short for the 2016-2017 fiscal year, and with the new fiscal year beginning on July 1, lawmakers are struggling to cover an anticipated $2.2 billion shortfall for the coming year.  Some key expenditures lawmakers need to find a way to pay for, and options for doing so, include:

  • Additional funding for public schools ($100 million)

  • Additional funding for county-based human services ($10 million for programs designed to combat the state's drug and opioid epidemic)

  • Restoration of $50 million that Governor Wolf had proposed cutting from state aid for school transportation

  • Restoration of a $30 million annual state subsidy to the University of Pennsylvania's veterinary school

  • Expanded legalized gambling by adding video slot machines in airports, bars, taverns and other special clubs

  • Borrowing against future payments from the multi-state tobacco settlement, likely in the form of a bond issue

What does not appear to be likely is pension reform, consolidation of state agencies and privatization of the state-owned liquor system.

While a framework may be in place, there is still plenty of work to be done. 

If you have any questions on the Pennsylvania state budget, please contact Schneider Downs or visit the Our Thoughts On blog.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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