Pennsylvania faces a long-term structural deficit and will enter next year’s budget deliberations without the financial cushion that helped policymakers manage the past three years, the Pittsburgh Post-Gazette reports. According to an economic outlook released last week by the state’s nonpartisan Independent Fiscal Office (IFO), if current laws remain unchanged, Pennsylvania’s revenues over the next five years would increase at an average annual rate of 3.1 percent, failing to keep up with a 4.1 percent average annual rate of growth in expenditures. The projected disparity is based in part on forecasts that the population of Pennsylvanians 65 and older will increase 29 percent between 2010 and 2020, while the state’s working-age population will remain unchanged. These demographic trends could limit growth in the personal income tax base and in the sales tax base, as older people tend to spend more of their disposable income on non-taxable goods and services, such as health care, the report noted. Payments into the pension systems for state and public school employees are scheduled to rise significantly in the next few years. State law requires the enactment of balanced budgets, and so the IFO noted that the disparity it projects in the coming years "merely reflects the difficult choices that policymakers will confront in future budgets."

For more information like this, try a FREE, 30-day subscription to EnviroPolitics.  
Our daily newsletter also tracks NJ & PA legislation—from introduction to enactment

Our most recent posts:
NJDEP: New Brunswick filed false water reports 
New Jersey birdman Pete Dunne is taking flight 
Congressional Energy and Environment Hearings Today 
Sandy recovery in spotlight at NJ municipalities conclave
Learn stuff and lose weight with EnviroPolitics 
NRDC blog editor sees a climate opportunity for Christie 
The environment in NJ? This guy’s seen and done it all (audio)