Five months into Pennsylvania’s fiscal year, revenues are higher than expected — thanks mostly to above-estimate corporate tax collections.
But state Budget Secretary Charles Zogby says the coming budget year may be even more difficult than the last two.
Officials at state agencies are being told not to ask for more funding next year. Personnel costs are going up, however, and he says it’s unlikely some agencies will be able to avoid layoffs.
“You look at the state’s balance sheet. We have zero in our rainy day fund. The cupboards are bare and they’ve taken the cupboards from the last administration,” he said Wednesday. “There’s no real reserves or pockets of reserves to go through.”
Zogby says he thinks the past two years of cuts and cost-savings in education and public welfare probably can’t be replicated in the coming budget year.
Much depends on whether Congress reaches a deal on scheduled automatic spending cuts and tax hikes go into effect to avoid the fiscal cliff.
Zogby says the impact of that plunge in Pennsylvania could amount to $300 million affecting areas such as social services, schools, and special education.