State Capitol

The Pennsylvania Capitol building in Harrisburg.

HARRISBURG — Pennsylvania appears on pace to finish its fiscal year with a balanced budget, Gov. Tom Wolf’s budget secretary Randy Albright said Tuesday.

The budget “will not just be balanced, but with a surplus,” he said.

Albright made the forecast during an update with reporters held six months through the state’s fiscal year, which ends June 30.

His comments came three weeks after the state’s Independent Fiscal Office (IFO) released an analysis that the state could be looking at $1.7 billion shortfall in 2019-20.

Albright said that the Wolf administration has a more optimistic projection than the IFO regarding how much tax the state will collect the rest of the year.

So far, tax revenue for the state in the first five months of the year is $913 million ahead of revenue for the same period in 2017, Albright said.

Officials in the administration of the Democratic governor aren't alone in thinking that the shortfall facing the state, if there is one, is smaller than the IFO warning suggests.

A spokesman for House Republican appropriations committee chairman Stan Saylor said the IFO projection of a shortfall also depends on spending increases that lawmakers in the Republican-controlled General Assembly won’t support.

The IFO’s shortfall is based on the assumption that the coming budget will cost the state $35.6 billion.

“There aren’t the votes” in the state House to support that level of spending, said John O’Brien, a spokesman for House appropriations committee chairman Saylor, a Republican from York County.

The IFO has a history of being overly cautious in projecting how much the state spending plan will cost, O’Brien said. Last year, the IFO projected that the state budget would be $33.5 billion, but the plan passed by the Legislature and signed by the governor cost $32.7 billion.

Albright declined to predict whether Wolf will seek any tax increases in the 2019-20 budget, but he noted that the governor has repeatedly asked, unsuccessfully, for the Legislature to pass a tax on drilling and charge communities without local police a fee for state police protection.

Wolf’s budget address is scheduled for early February.

Albright said that when budgeting, state officials will first look to see if there are ways to operate more efficiently before looking to spend more.

“That’s how the process will start,” he said.

The IFO had also suggested that it will cost the state $150 million to pay for General Assistance benefits, a safety net program reinstated by Wolf after a Supreme Court decision. Albright said that estimate greatly overstates what it will likely cost the state.

The IFO estimate was based on the number of people who were getting General Assistance before the Legislature ended the program in 2012. Albright said that because the state has since expanded Medicaid and the economy has improved, there are far fewer people seeking General Assistance than there were in 2012. He said the cost of reinstating the program will likely be closer to $25 million.

The 2012 law that ended General Assistance was thrown out by the state Supreme Court in July. The justices concluded that lawmakers had so drastically amended the legislation that the final bill never received the level of consideration by lawmakers required by the Constitution.

About 60,000 people were receiving about $200 a month when the program came to an end. Albright said that only about 3,000 people have applied for the assistance since it was reinstated.

Albright said the state will likely have to come up with additional funds because there are Human Services costs and state prison costs that will likely be higher than budgeters had predicted. The Human Services costs are largely due to the struggle of paying for long-term care for an aging population, Albright said. The state prison is dealing with overtime costs including those associated with the September crackdown to slow the smuggling of drugs into the state’s prisons.

Even with those over-runs, Albright said the state’s revenue should be sufficient to end the year with a surplus.

John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

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