The 9-month long budget impasse in Pennsylvania ended last Wednesday after the governor conceded defeat. The $30 billion budget package with no increase in tax has finally been approved Wednesday.
With oppositions from lawmakers, media, and the public, Governor Tom Wolf agreed to end the budget impasse after nine months since the start of the fiscal year on July 2015. The approval comes without the governor's signature, reports Bloomberg.
President Barron thanked students for their role in enduring the Pennsylvania budget impasse. https://t.co/cM3fE1PDYC
— Onward State (@OnwardState) March 29, 2016
How the Budget Crisis Began
According to ABC News, first-term Democrat Governor Tom Wolf initially proposed a multibillion-dollar tax increase, the biggest proposed tax increase in America, which would boost public school aid and end long-term deficit of the state. However, the tax increase proposal was opposed by many Republican legislators.
Instead of increasing taxes, the lawmakers wanted to adjust benefits of workers to improve the underfunded pensions system. As Matthew Brouillette puts it, this was the start of the Lone-Wolf Doctrine.
While making his 2015 budget proposal last year, Governor Wolf was quoted saying "If you don't agree with my ideas, here is my request: please come with your own ideas." In response, the lawmakers proposed revisions to the budget which the governor all vetoed. This started the 9-month long budget impasse.
Effects of the Budget Impasse
While the budget has finally been approved, the budget impasse has greatly affected the nonprofit organizations and the education system. Such that school districts have accumulated mounting borrowing costs just to keep classrooms open. According to Bloomberg, this 9-month crisis may result to a credit downgrade by Standard & Poor.
The 9-month delay in the budget approval was the longest recorded since 1956. The governor may have relented in the face of opposition, layoffs, and school shutdowns, but he plans to veto the fiscal code, which outlines the allocation of funds for education.
ABC News states that the governor's office will distribute the funds in the "most appropriate manner possible." Governor Tom Wolf is now eyeing the 2017 budget, planning to veto a companion bill to the supplemental package. In three months time, a new budget will be evaluated with an opposition already set by the governor.
Illinois remains the last state without tax and spending plan for fiscal year that started July 2015. To know more effects of the budget impasse, take a look at the video below:
