State Budget - Fiscal Year 2025-26

COLEMAN: The Pennsylvania Budget Should Be a Taxpayer Budget

You may have seen headlines about Pennsylvania’s late budget.

Finishing up the budget is important. However, the quality of the budget is more important than the timeline. An imbalanced budget this year makes it more likely that we’ll be facing tax increases in the near future and that is something we need to avoid. I wanted to take this opportunity to discuss with you how I approach the budget and the rules I want to see followed to protect taxpayers.

First, we owe you transparency and accountability about how your tax dollars are being spent. Legislators should have three days for due diligence in reading the budget package and discussing it with constituents before having to act on it. Three days is the minimum constitutional requirement. In the past, legislative maneuvering has practically eliminated the public’s ability to fully review the budget before final passage.

Next, the Commonwealth cannot spend more than it brings in. Our budget must be built on a realistic forecast of revenues and future obligations. Unfortunately, as acknowledged by nearly everyone, including our state’s Budget Secretary, Pennsylvania has a multi-billion-dollar structural budget deficit (i.e., our recurring expenses are significantly higher than our revenues). Last year it was $3.6 billion, and the governor’s initial budget proposal for the current fiscal year, even including dubious revenue estimates on new taxes that haven’t been adopted, would increase the deficit to nearly $5 billion.

This imbalance is what happens when you allow expenses to grow significantly faster than the rate of inflation while revenues don’t keep pace, which is why the governor’s plan, which grows spending at more than twice inflation, is just unsustainable and not something I could support. Even the modestly lower budget recently passed by the House increases spending by nearly $3 billion, or 6 percent, still way too high when inflation was less than 3 percent.

Rather than throw more money at everything as proposed by our Democratic governor and House, a responsible budget would prioritize taxpayer funding based upon our goals and the performance of the programs. That’s why I co-sponsored legislation, Senate Bill 474, that would establish zero-based budgeting in the commonwealth and require every state agency to justify their spending with intensive reviews of the efficiency and effectiveness of their activities.

We must ensure adequate funding for core public services like basic education and law enforcement, but we shouldn’t accept, for example, ranking in the top 10 states for per-pupil spending while falling to the bottom third in academic achievement. Tax dollars should be well spent, and an annual review of program performance should be part of the process. When cabinet secretaries come before the Senate, they consistently blame poor performance on inadequate funding. At some point, we have to reexamine whether a program will ever function; more money cannot always be the answer.

As part of a responsible budget, we would also maintain a reasonable savings account or Rainy Day Fund to cover true emergency or unexpected costs and protect our credit rating to save on interest when the state issues bonds. The Democrats’ budget proposals would drain our reserves within two years, forcing the enactment of massive tax increases or expense reductions.

I don’t want either of those alternatives, so I am actively looking every day for opportunities to save money in government. Most recently I have been evaluating the commonwealth’s aircraft operations that spend millions of taxpayer dollars to buy airplanes and fuel and hire pilots to fly the governor other officials around the state for press conferences.

While politicians might have a difficult time following these budget rules when spending other people’s money (OPM), i.e., tax dollars, Pennsylvania families that only get to spend their own money deal with these budget realities every day.

Families know they can spend only according to their actual income, not what they dream it will be. That often requires prioritizing—the mortgage or rent payment needs to be made before a more extravagant purchase. Maybe the car can’t be replaced while the kids are in college. If there’s job uncertainty, maybe it’s better to save the cash and cut back on entertainment. These are the tough decisions real families without OPM need to make.

Because of the way I try to follow these budget rules and think about OPM when casting votes in the Senate, I’m probably not the typical Harrisburg politician. As we move closer to an inevitable announcement of a budget deal, I’m encouraging my colleagues not to be, either. The budget deal needs to be a good one for Pennsylvania taxpayers.

“If we follow Gov. Shapiro’s spending plans, there will be a $27.3 billion hole in the state’s finances in five years. Shapiro’s grand spending plan simply isn’t something we can afford without high tax increases – which no one wants. Rather than spending with abandon, I am committed to searching for efficiencies and cost reductions while continuing to fund core government responsibilities such as public safety and basic education.”

–Senator Jarrett Coleman

Our next steps will be to identify underperforming programs and identify savings. The Senate Appropriations Committee will hold public hearings to examine the Shapiro spending plan from
Feb. 18, 2025, through March 6, 2025. Bookmark this page and check back for updates.