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State’s fiscal challenges are alarming

Since all seats of the Pennsylvania House of Representatives and about half of those of the state Senate will be on the state’s 2026 election ballots, it’s safe to surmise that commonwealth residents need not fear a state income tax increase, no matter when the Legislature completes its work on a budget for the 2026-27 fiscal year.

The purported deadline for completion of that budget is June 30, but it took the General Assembly more than four extra months beyond June 30 of this year for work on 2025-26’s $50 billion spending package to be finished.

It was a mess for which the Legislature should be embarrassed, but it seems that the word “embarrassment” is nowhere to be found in Harrisburg’s governmental halls.

All considered, it is safe to assume that, no matter the fiscal challenges moving forward, the Legislature will find a way to conceal the seriousness of the situation, at least until sometime in early 2027.

However, even then lawmakers will be gun-shy about mentioning higher taxes because, in the eyes of Keystone State politicians, the two words “tax hike” are tantamount to the kiss of death for their political careers, even if there is no guarantee of that.

Will the voters of Pennsylvania remember the just-completed 2025-26 budget debacle and decide that many new faces are needed in Harrisburg? Based on past experiences, probably not; the state income tax rate remains unchanged.

However, there is a deeply troubling monster lurking just over the fiscal horizon, if the state’s Independent Fiscal Office’s data is correct, along with its evaluation of the information that it possesses.

Will voters be alarmed enough in 2026 — about the IFO’s current prediction of a possible fiscal crisis looming — to want to make changes at the ballot box during the coming primary and general elections, or will they simply keep their faith in who represents them now, whether or not that representative is working actively and aggressively on behalf of what is best for the state rather than what’s best for his or her political party?

Judging from the many voters’ penchant for voting for party rather than needed leadership changes, it probably is safe to conclude that there won’t be many new faces in the Legislature in 2027, no matter what bigger problems might result over the long run from maintaining the status quo

“In its five-year look ahead, the IFO said that if projections hold, the state is on pace to deplete the General Fund surplus in the coming year and on pace to wipe out the $7.5 billion Rainy Day Fund by 2027-28.”

That is a quote from a CapitolWire article published in the Mirror’s Nov. 25 edition. The article continues:

“Heading into the coming year, the state is facing a projected deficit of $5.84 billion — $600 million more than the deficit that budget negotiators faced in 2025-26.”

But more troubling than those numbers is the question about what percentage of state residents was aware of lawmakers’ need to shift $670 million from special funds to help balance the budget of 2025-26, a move IFO says will be difficult to repeat next year, thus making balancing the 2026-27 budget more difficult.

Looking down the proverbial road, the state might need a miracle to avoid a financial disaster, and a detestable income tax increase might be the only savior.

— Altoona Mirror

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