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Old 02-05-2018, 05:54 PM
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Mary Pat Campbell
Join Date: Nov 2003
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Concern mounts over weak status of state finances
Weakened financial stability and growing deficits erode the essential services that government provides to people and Pennsylvania is mired in many years of financial mismanagement by the state legislature, according to state Sen. Art Haywood (D-4).

Haywood counted among other Philadelphia-area lawmakers to weigh-in on a January report that revealed Pennsylvania’s tendency in recent years to cover deficits through borrowing has led to a failure to build up a rainy-day fund.

A recent study noted the state is in danger of not being able to weather a future recession.

“We are mired in many years of financial mismanagement by the state legislature. The state’s finances have declined to the point where $1.5 billion was borrowed to meet its current expenses,” Haywood said.

Further, the state’s poor credit rating has led to Pennsylvanians paying over $100 million more in interest and its credit rating has been negatively impacted, he said.

“An unpredictable, unstable financial situation with recurring deficits stops us from making investments to create a skilled workforce and attract businesses and jobs to Pennsylvania,” Haywood said. “Finding solutions to close Pennsylvania’s deficit gap should be the priority of every lawmaker representing the people of Pennsylvania. I know that it is certainly a priority of mine.”

A study by Moody’s Analytics stress-tested all 50 states to determine if their reserve funds were adequate to get through a moderate recession without severe fiscal pain.

The website reported that Pennsylvania’s reserve fund in 2017 was equivalent to negative 1.8 percent of revenues, and the analysis found the state needs at least 6.9 percent to weather a moderate recession.

“The Moody’s recent report mirrors our repeated calls for sustainable recurring revenues to ensure the fiscal health of the Commonwealth,” said state Sen. Sharif Street (D-3).

“Moreover, we should be proactive in pursuing policy initiatives that address these issues. The expanded revenue from the legalization of recreational marijuana is one avenue and reforms such as reducing the prison population and curtailing the excessive spending required to maintain the prison industrial complex are both morally and fiscally sound,” he told The Tribune.

Commonwealth citizens are the state’s most important resource and, as such, investing in education will help to attract companies like Amazon that are tech focused and poised to grow the economy, Street added.

“This is a sign that we must be bold and progressive in addressing our fiscal challenges and conservative in our revenue projections,” he said.

Pennsylvania’s money and government problems have damaged its reputation among residents, Sheila Weinberg, founder and CEO of Truth in Accounting, wrote in an editorial.

Weinberg, whose Chicago-based nonprofit researches government financial data and promotes transparency, said state lawmakers bought a short-term fiscal fix with the October budget compromise.

“Even with the recent pension reform, however, I am still concerned that the frequency and seriousness of these financial trends will continue to increase,” she said.

State Rep. Chris Rabb (D-200) recently hosted his first House Democratic Policy Committee public hearing on bold budget innovations for the betterment of all Pennsylvanians.

Rabb expressed his concern about state finances.

“We’re looking for innovative budget proposals that can help us improve economic security for all, better leverage taxpayer dollars for environmental stewardship, and ease the burdens on Pennsylvania’s criminal justice system,” he said

Both Haywood and Street noted the recent federal government shutdown only further served to erode confidence.

“The seemingly endless partisan bickering which has caused the breakdown at the federal level is unhealthy for our democracy and must end,” Haywood said.

“The practical side of the shutdown is that non-essential services are suspended, national parks are impacted, federal workers lives are disrupted and military pay put in jeopardy. No business can operate in this manner and no government should either,” he said.

Street said the shutdown was a direct result of President Donald Trump and the Republican Congress’s short-sighted policies that have limited the ability to solve real problems.

“The Republicans, appalling in their willingness to withhold vital funding for 9 million kids under the bipartisan Children’s Health Insurance Program and failure in dealing with immigration reform underscores their inability to effectively govern,” Street said.

“The most important role of government is the protection of the people; it should never be partisan. The president of the United States and Congress are charged with meeting this standard and must get back to making government work,” he said.


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