Prepping for the summer food fight

By Dave Anderson:

State budgets are the next big political food fight.  The normal sources of revenue are down as property values have collapsed, retail sales have fallen, incomes have fallen and the high tax value purchases (gambling, booze, tobacco) have not been the windfalls that some politicians and budget wonks had hoped them to be. 

Last year, Pennyslvania went three months without a budget because there was a significant gap between the desired spending level and the then current revenue streams.  That gap was closed by a combination of new taxes, stimulus funds and reducing some expenditures.  As I argued then, the subtext of the fight had to be seen as a precursor as to who gets blamed for the FY-2011 budget fiasco. 

That fight is fast approaching.  The state is seeing a significant chunk of stimulus funds that floated last year's budget disappear this year.  More importantly, the state is seeing a weaker economy and thus lower tax collections.  The Post-Gazette has details:

As of the end of February, state tax revenues were $477 million below
estimates. Mr. Corman said the March revenues also are bad, and the
month will end today with revenues down by an additional $230 million or
so.

There are a couple of countervailing factors that could offset a billion dollar tax shortfall, but those factors are a bit more speculative than the current cash in hand.  We are looking at another food fight where there is no incentive to compromise as compromise will depress someone's base.  I don't expect a budget to be signed into law before at least August, and I would not be surprised if there is not a signature on the budget on Columbus Day