HARRISBURG - Some quick thoughts following the budget presentation by state Secretary of the Budget Mary Soderberg:
-Right now, the state revenue is 7.5 percent below projections or $1.1 billion. But the hammer may not have fallen yet. That could come in March and April when corporate and income taxes start rolling in. Business taxes are 9.4 percent below projections and income taxes are down 4.6 percent Uh oh.
-I think there’s going to be resistance in using Rainy Day Funds to balance the budget from both sides of the aisle. Rendell wants to use $250 million. While the economy is bad, is this the emergency that’s the Rainy Day Fund is suppose to be reserved for?
-$1 billion in budget cuts come from 101 eliminated programs and reducing funding for 346 programs. I doubt that will hold because there are things like Ag Promotion and Ag Education and Exports that certain legislators will fight tooth and nail to keep, even in this economy.
-If Republicans begin calling for tax decreases during this tough economy, and there already are $1 billion in savings from proposed program cuts or eliminations, just what else can be cut from this budget? That could be where the real budget battle is fought this year.
-I think calling for tuition help for families making just less than $100,000 annually is only a starting point for negotiations. That number will probably fall. Can we really argue that a family making $90,000 has the same struggles as those making $35,000 or even $50,000? Do they all even live in the same neighborhood?
-With gasoline prices always in flux, freight rail has weathered the current economy rather well as opposed to trucking. Rendell spots this and is looking to invest millions in improving the state’s freight rail infrastructure. Interesting. What’s past is present, again.
-The state expects to reap the benefit of about $2.5 billion in federal funds to help them balance this fiscal year and next fiscal year (2009-10). Soderberg has admitted those funds are “not ironclad” because, simply, Congress and the President have not yet approved it. What the fallback plan would be is unknown, but I bet the personal income tax and sales tax would look attractive.
Keep checking back as we gain new insight and analysis in the governor’s budget proposal. The Mobile Nest is moving on.
