Budget Hearing Wrap with Governor’s Office of the Budget

Office of the Budget Secretary Uri Monson testified today before the House Appropriations Committee.  House Republicans used this opportunity to follow up on dozens of unanswered questions from agency leaders throughout the past three weeks, including the Governor’s so-called “Blueprint for Higher Education,” debt management, and the $500 million PA SITES program.  Republicans also focused their questions on Pennsylvania’s structural deficit and spending down the Commonwealth’s General Fund Surplus and Rainy Day Fund to pay for future budgets.  There is $2.5 billion in new or expanded spending on government programs, which will increase our budget in future years.  Chairman Grove ended his questions with Sec. Monson by saying, “If I were planning to do a get out of business sale, this is the kind of budget I would do.  I would empty my reserves, sell my assets, and get out of town.”   
 
Key Takeaways

• Governor Shapiro’s budget will completely eliminate the General Fund surplus and Rainy Day Fund balance within the next five years.  House Republicans posed questions to Sec. Monson regarding the long-term fiscal health of the Commonwealth.
o Sec. Monson acknowledged that the General Fund Surplus and Rainy Day Fund balance were integral to increasing Pennsylvania’s bond rating and achieved this before Shapiro became Governor. However, the House Republicans disagree with the Shapiro Administration on the long-term implications of spending this money on recurring costs.
• Sec. Monson provided no plans to cover recurring costs with recurring revenues other than to question the projections on revenues based on past budgets.    
• Sec. Monson stated he views the late budget as a personal failure and believes having an on-time budget is important. 
• House Republicans asked for information on the full cost of the Governor’s so-called “Blueprint on Higher Education” and were left without an answer, again.  It was also uncovered that the total financial costs of the “blueprint” have not been identified. 
o Sec. Monson stated legislation would be forthcoming in “about a month,” giving the General Assembly three months to implement a massive change to the three parts of Pennsylvania’s higher education system. 
• When asked about implementing zero-based budgeting, Sec. Monson implied Governor Shapiro doesn’t have the “buy-in” to implement the process within his government agencies.  If this is the case, this would be a complete failure of leadership by Governor Shapiro.  



Notable Q&A

Rep. Lou Schmitt asks Sec. Monson about using the Rainy Day Fund to balance the budget in future fiscal years.

Rep. Zach Mako asks why the $500 million PA SITES program is being funded through a bond program, and not utilizing surplus funds.

 

Rep. John Lawrence asked what the budget will do to address recent hospital closures, the crisis in Chester City, information on debt management, and if the Governor is committed to delivering an on-time budget.

Rep. Ann Flood asks Sec. Monson if he will follow current law as written and certify $1 billion in Property Tax Relief for all homeowners.

 

Rep. Clint Owlett asks questions about the financial impact of the Governor’s so-called “Blueprint for Higher Education.”

Rep. Jim Struzzi asks Sec. Monson about the importance of the General Fund surplus and Rainy Day Fund balance on Pennsylvania’s bond rating.

Rep. Kristin Marcell pressed Sec. Monson to engage with all stakeholders on the Governor’s so-called “Blueprint for Higher Education” and emphasized the good work being done at the local level by Community Colleges.

 

Rep. Eric Nelson asks Sec. Monson’s view of the projections by both the Independent Fiscal Office and the Department of Revenue who have reported expenditures are exceeding revenues in future budgets.

Rep. Thomas Kutz asks how the Shapiro Administration is prepared to handle payments to human service providers following the Change Healthcare cyber-attack.

Rep. Torren Ecker asks Sec. Monson how often he and Gov. Shapiro talk about zero-based budgeting.

Chairman Grove questions the projected expenditures in the Governor’s budget and the impact recurring costs of the Democrat BEFC report will have on Pennsylvania’s bond rating.

Watch Full Hearing

Watch the full hearing here.