Pre-pandemic Pennsylvania wet day fund second smallest within the nation: Report
Pennsylvania’s pre-pandemic wet day fund would have lined lower than three days of presidency spending, in keeping with a brand new report, rating it the second smallest reserve account within the nation.
Second solely to Illinois – which might theoretically burn by means of its personal wet day funds in just some hours – Pennsylvania’s $243 million reserve account lined simply 2.7% of general annual state spending.
Pew Charitable Trusts printed the evaluation this week that discovered half of states had no less than 29 days value of spending socked away in wet day funds in 2020. Whereas some states relied on these reserves when the pandemic swept throughout the nation that spring, many extra relied on federal stimulus and catastrophe assist.
States additionally boosted their reserves with tax revenues that bounced again stronger than anticipated after months of pandemic-related financial and journey restrictions. In Pennsylvania, lawmakers socked away $2.5 billion in gross sales tax income and greater than $5 billion in American Rescue Plan stimulus in preparation for an $8 billion projected fiscal cliff.
This resolution doesn’t sit properly with legislative Democrats, who’ve remained persistent of their criticism of Republican leaders’ unwillingness to dole out the cash to varsities, entrance line staff and hard-hit small companies.
“The federal authorities gave us billions of your tax {dollars} to assist PA recuperate from COVID-19, and a few people are identical to ‘nah’,” stated Rep. Jordan Harris, D-Philadelphia, by way of Twitter on Thursday. “It is sitting in a wet day fund whereas it continues to pour on companies, college students, mother and father, and frontline staff.”
In June, Senate Appropriations Chairman Pat Browne, R-Lehigh, stated the prudent financial savings plan will stop taxpayers from reaching into their pockets to fill a $7 billion deficit projected in simply two years.
“Those that fail to study from historical past are doomed to repeat it,” he stated. “We don’t wish to empty the piggy financial institution and place the monetary safety of the commonwealth in danger when federal stimulus dries up.”
Browne’s feedback reference cash given to the state throughout the Nice Recession that legislators poured into public schooling. In 2011, the Common Meeting confronted a alternative – elevate taxes to cowl greater than $800 million in schooling funding financed by depleted stimulus or make cuts to shrink a $4 billion deficit and keep away from large hikes.
The scenario, Browne stated, has impacted college students and the state’s monetary well-being for the previous decade. He stated this yr reveals an “unbelievable quantity of similarity to the place we have been 10 years in the past.”
