August 2010 Column - Independent Fiscal Office Would Ensure The Accuracy of Revenue Estimates
By Dave Hickernell, State Representative
98th Legislative District
Pennsylvania finished the last fiscal year with a budget deficit of more than $1 billion. That means actual revenues were more than $1 billion below the $25 billion estimate provided by the governor’s budget office. In the previous fiscal year, actual revenues were $3.2 billion below projections.
Large revenue shortfalls like the ones we have seen in recent years are unacceptable. We cannot continue to spend based on revenue estimates that prove to be seriously over-inflated. At some point, those revenue gaps will need to be filled and that could mean a major tax increase for Pennsylvania taxpayers. While a major step toward resolving this problem would be to reduce state spending, something must be done to ensure the accuracy of the revenue estimates on which we base those spending decisions.
Currently, the executive branch has full authority over the budget office and the result has been the overstated revenue estimates and understated costs we have seen in recent years. It is difficult, if not impossible, for lawmakers to make fully informed budget decisions when the budget numbers we receive are developed and verified by one of the parties with a stake in our negotiations.
If we are going to stop this trend of multi-million dollar budget deficits, we must take steps to make sure the numbers lawmakers use when crafting the state budget are accurate and free from partisan influence. The creation of a non-partisan, independent fiscal office like those used by 36 states and the federal government may be one solution to the problem.
During negotiations over the state budget earlier this year, one of the major sticking points was a proposal by Sen. Pat Browne (R-Lehigh) to create such an office to generate revenue estimates and set spending levels. The proposal was the source of a great deal of discussion and debate and, in the end, an agreement was reached to postpone consideration of the proposal until the fall so a budget could be passed by the legally mandated deadline.
An independent fiscal office would provide the General Assembly and the public with more accurate revenue projections, which will enable us to enter budget negotiations with a reliable estimate of the amount of revenue available for appropriation. I support this proposal because I believe an independent fiscal that is not beholden to any caucus or agenda would remove political considerations from budget projections and revenue estimates.
An independent fiscal office with no stake in the budget negotiations would enable all parties involved to begin the process on an equal footing. When legislative session resumes in September, I look forward to considering Sen. Browne’s proposal.
Rep. Dave Hickernell
Pennsylvania House of Representatives
Contact: Sean Yeakle
House Republican Public Relations