The economic forecast took a turn for the worse after the state budget was passed, and it’s showing up in tax collections that are already running $345-million dollars below expectation. Budget Secretary Charles Zogby estimated a shortfall of $500-million dollars by the end of the fiscal year. “I tend to think that this is an optimistic scenario,” Zogby said at the mid-year budget briefing. “I think we’re expecting and planning for a much bigger shortfall.”
Zogby’s office is currently working on options for a budgetary freeze, which Governor Tom Corbett could act upon by the end of the month. “That will help alleviate – to an extent – the FY2012-2013 challenges that we’re facing.”
Taking into account the revised revenue outlook and projected growth in mandatory spending, Zogby estimated that the administration will have a $750-million dollar budget hole to fill in order to balance next year’s budget. “Right now I’m looking at the expenditure side, no tax increases,” Zogby added.
While Governor Tom Corbett will deliver his budget address in early February, Democrats say it’s premature to be projecting such dire budget circumstances next year. “The governor is using scare tactics to make his case for cutting another three-quarters of a billion dollars in needlessly painful cuts next year,” House Democratic Appropriations Chair Joe Markosek (D-Allegheny) said at a capitol news conference. Markosek contends that year-to-date revenue collections are actually up when compared to the same five-month period last year.