February 8 — Since Pennsylvania Governor Josh Shapiro unveiled his wish list for the 2024-25 fiscal year in Pennsylvania, a whole lot of people are sorting through the nuts and bolts of the proposed budget and some of them are thinking he’s got to be kidding.
There is a whole lot of new spending in this $48.3 billion plan for PA. It’s a 7.5% increase over last year.
PA Representative Rob Kauffman noted, “And there’s no talk of cutting anything.”
Pat Ryan of NewsTalk 103.7FM pointed out, “That’s how deaf he is. You know that we’re in deficit spending, you know the country is in the hole trillions of dollars, and yet you put forth free tampons for everybody, free food for everybody, more money for education, and not one word of cut. Doesn’t that speak volumes right there.?”
“It does,” Kauffman agreed. “It’s funny because these credit rating agencies, you hear him talking about credit ratings agencies and and leaders everywhere talking about it, but they help feed into this I believe, these credit rating agencies, give him the stamp of approval because we have a lot of money in the bank, but they don’t actually look at the years out. They don’t look at what buying tampons for every teenage girl will cost and breakfast for every kid, whether they need it, want it or not, is going to cost. They don’t see and they don’t pay any attention to the fact that his proposals this week, actually put us further in the hole. With his proposals, that move moved the goalposts up. So we are now going to be spending all of our reserves and all of the rainy day fund. I believe we’re now in the 2027 range.”
Where are the offices saying this can’t be done and warning the credit agencies not to support this?
Kauffman said, “It’s interesting because the independent fiscal office here in Pennsylvania, that’s like the Congressional Budget Office, you hear about that in Washington. About 12 years ago, we set up the independent fiscal office, and they do the exact same thing. They offer a nonpartisan approach to where we are. They are the ones who initially two weeks ago said that we would be out of money by 2028 at the current level, but the problem is the press doesn’t report that and he’s certainly not going to talk about it. So it’s up to people like me, legislators to talk about this, and I don’t know in the current situation, I don’t know if it saturates because Josh Shapiro is such a fantastic guy. All you have to do is listen to him and he’ll tell you about it.”
Michele Jansen of NewsTalk 103.7FM said, “What bothers me, what he’ll say of course, is all the new revenue we’ll get from making recreational marijuana illegal, from taxing the games of skill.”
Ryan noted, “Recreational marijuana, we already have a textbook example happening in Colorado. Fine, show me the revenue and then show me the unintended consequences. What about the schizophrenics and what about the people that are depressed and what does it cost to take care of them? What about the neighboring states and how much they’re complaining about it? We have textbook examples here, Josh. Why don’t you do all of it? If you’re going to show a great profit then how much are we in the hole for you putting a bong in a kid’s face?”
Kauffman added, “He also plays fiscal funny games where I understand he provides for funding and I don’t want to speak out of turn, but I believe it was the education funding that he provided for in this budget, but he didn’t actually fund it in the out years. It’s like a shell game and that’s what he’s doing. You have new funding, new revenue, you’re talking about recreational marijuana, the skill games talking about a few 100 million dollars, but the new programs are in the billions of dollars.”
The proposal is that skill games would be taxed 40%.
Ryan asked, “Who would go into a business like that unless you are making that much bank? This has been going on for years in these skill games, the lawmakers haven’t been able to get your arms around it. It’s fascinating to me that you haven’t been able to figure out a way in which to tax those things.”
Kauffman said, “Because it’s the political battle because see, the thing is the casinos, the legalized gambling in Pennsylvania, they actually don’t want skill games. They want enforcement against the skill games because the skill games they believe in and want them to be illegal because of course they want to be one of the only games in town. So that was a lot of the rub is that the casinos were yanking in this way but I believe the revenue is going to win out this year because everybody wants more cash.”
Another piece of the budget is increasing the minimum wage in Pennsylvania to $15 per hour.
Jansen said, “The problem everybody forgets about is there’s always give and take. It’s always pluses and minuses for every choice that’s made and I continue to see the failure of people to understand what the $15 minimum wage means. He just talked about another source of revenue. If we make the minimum wage $15, look at all the more revenue that the state will take in on these increased salaries as if there’s no downside or exiting of jobs that comes along with such a decision.”
Ryan said, “We’ve got another textbook example that — Maryland is pulling the same thing and you’re already seeing in Washington County smaller businesses are paring away people, they’re not rehiring. They’re putting more pressure on the other guys and gals on the operation. That’s a perfect example. Here’s another one for you, Josh, just look to the south of Pennsylvania.”
Kauffman suggested, “You also have to look at one of the things that I hear most about when it comes to the minimum wage are a lot of the nonprofits and how they’re going to get the squeeze and it’s a huge concern. I’m very concerned this year because I believe that the tea leaves are saying it’s going to happen. I don’t know at what level it’s going to happen, but I’ve even heard some folks in the business community saying with a wink and a nod well, we could weather $12 or they sound like they’re ready to accept it. That’s scary because when you have folks who are saying who would usually be against it, saying, well, we might be able to negotiate and I think even in the Senate, they’ve talked about a negotiated minimum wage. The reality is I just don’t see the need for it. I mean, if you go out in the street, if you want $15 an hour, you can find a job that’s 15 bucks an hour. In reality, that minimum wage, they want to raise it and the reason that the left and the progressives want to raise it is because a lot of the union wages and the scale wages do have an escalator that is related to the minimum wage. So it’s really more about payback for their folks rather than actually believing that people are sustaining their family on the minimum wage.”