It’s budget season again in Harrisburg. It’s like Groundhog Day. Please, refrain from getting so excited.

Earlier this month the House has passed its version (HB218) of the 2017-2018 budget and sent it to the Senate. This year, the budget is approximately $32 billion, with the two major areas of PreK-12 education ($12 billion) and health and human services ($13 billion).

Currently, the three largest taxes that contribute to the funding of that $32 billion budget come from personal income taxes ($13 billion), sales and use taxes ($11 billion) and corporate taxes ($3 billion) for a total of $27 billion. The remaining revenues come from a host of smaller taxes and fees. Now if the legislators propose spending more money than the expected revenues will cover, they’ll have to start talking about raising existing taxes, creating new taxes, issuing bonds (which adds to the public debt), or one time revenue gimmicks like the Farm Show Complex lease-lease back proposal that is under consideration. Additionally, proposals to authorize internet gaming and further privatization of the state’s liquor system will generate new revenues.

In the months ahead, legislators and the governor will argue about how to balance expected revenues with expenses. The problem is always that there is never enough money to cover all the proposed spending and sometimes even the expected revenues will fall short of expectations. House and Senate Republicans strongly oppose higher taxes, and the Governor has conceded that he won’t pursue them. They want to get re-elected and raising taxes doesn’t look good on the resume. Additional revenue “enhancements” being discussed are closing the Delaware Loophole, which currently allows corporations to avoid net income taxes by incorporating in Delaware, and the shale gas extraction tax. Both options are unlikely to be enacted for various reasons.

The option of cutting spending on existing programs is difficult as well. The state spends millions on health care services, community/economic development, transportation infrastructure, corrections, education and law enforcement to name a few of the hundreds of ways tax dollars are spent. Those proposed “cuts” could also be to some of the state’s tax credits, including the Film Tax Credit. However, while some credits may prove to be worth reviewing closely, I feel confident the film tax credit will remain at its current level.

As the House and Senate continue to deliberate the budget for May, June and possibly beyond… PaFIA will remain vigilant and actively engaged.