A $673 Million Mistake...Isn't a Mistake

In June, when the state legislature passed the budget, they included something extra: a $673 million “supplemental appropriation” to cover overspending in the previous fiscal year. In other words, the Wolf administration spent far more than what was budgeted, and the legislature enabled this by quietly approving the money after the fact.   

This isn’t the first time this has happened. Budget overspends followed by supplemental appropriations have become standard procedure rather than a rare expedient. They don’t look accidental. More likely Governor Wolf has become comfortable submitting an artificially small budget up front while hoping sufficient monies will materialize to match actual spending. This is a way to avoid the constitutional requirement for a balanced budget (Section 13a). If the state had come up short on revenue for the year rather than ahead, the overspend would have required a tax hike. Unfortunately the administration and its allies will keep repeating this trick unless public pressure makes them stop. 

Public pressure rarely happens without transparency. To bring the needed transparency, Rep. Seth Grove (Dover) and Sen. Kristin Phillips-Hill (York) have proposed a very worthy reform: a constitutional amendment that will require supplemental spending to be voted on in a standalone bill, not tucked into the spending bill for the next year (press release). The amendment would make budget overruns more visible and would put legislators on record as explicitly assenting to them. 

In order for a constitutional amendment to be approved, the legislation must be approved by the General Assembly in two consecutive sessions, and then be approved by voters in the ensuing election. In other words, this reform is three years in the future under the most optimistic scenario. 

There have been moves for reform along other channels as well. This year the legislature included important new language in the administrative code bill, another part of the annual budget package. The state administrative code now requires any year-end supplemental appropriation request be submitted with an explanation and a set of reform proposals to offset the expense and prevent future overruns. There’s no clear penalty or enforcement mechanism, but perhaps one can be added in a future session. 

Fiscal reform is, as it ever has been, a slow grind.