The coronavirus crisis will send the Pennsylvania budget into a deficit that at least temporarily will be measured in the billions of dollars and trigger legitimate concerns about covering the full cost of education, human services and other government basics.
State Sen. Pat Browne, a Lehigh County Republican and chairman of the Senate Appropriations Committee, described the effects of coronavirus on the state’s finances in hydrologic terms: “It’s a thousand-year flood.”
And state Sen. Judy Schwank, a Berks County Democrat and minority vice chairwoman of the same committee, said a lot of the financial picture “is up in the air right now, but I have a sense of dread.”
Their comments came following the 28th day that the ever-worsening coronavirus crisis has been measurably present in Pennsylvania.
On March 6, state officials reported the first two cases of virus in the state ? one each in Delaware and Wayne counties ? and, as of Thursday, there were 7,016 cases. During that time, government-ordered shutdowns have closed thousands of businesses and kept millions of workers home, crushing state revenue from various taxes.
A piece of hard evidence arrived Friday, when Gov. Tom Wolf’s office said the state would stop paying about 9,000 state employees whose offices have been closed because of the pandemic and who are unable to work from home.
The pay freeze affects about 12% of the state workforce, but all will keep their health care benefits. The two hardest-hit departments are Transportation and Revenue.
“This was a difficult decision as our commonwealth faces significant fiscal challenges,” Wolf’s office said in a statement.
Earlier in the week, the Department of Revenue said in a written statement its collections for March were $294.6 million less than anticipated, and “the pandemic will have a greater impact on revenues in the coming months.”
And more than 1 million Pennsylvania unemployment claims were filed in the past three weeks, according to a state website. Nationwide, a record-setting 6.6 million claims were filed for the week ended March 28, the federal government said.
Browne said he anticipated that financial discussions involving Wolf’s office, the state Senate and the House likely will be taking place on a daily basis to deal with the unprecedented financial challenge.
“It is all hands on deck right now,” he said.
Schwank said the anticipated financial shortfalls will force government to make sure it can cover the cost of basic things like elections, human services and education.
“We will determine what our core is,” she said.
The budget deficit on June 30 could reach $4 billion, Browne said, but that estimate is artificially inflated by the pushback of tax-filing deadlines for individuals and corporations from April and May into July and August.
The foremost question at this point, Browne said, is determining exactly how the bulk of the $7.5 billion that is available to Pennsylvania from the recently approved federal stimulus package may be spent.
About $5 billion of that money comes under the heading “general state relief,” according to Browne. But, he said, it is unclear whether the money must be spent on specific coronavirus crisis-driven items or whether it can be used as a substitute for general state revenue.
More than a month before the first coronavirus cases appeared in Pennsylvania, Wolf proposed a 2020-21 general fund budget of $36.1 billion, with a spending increase of 4.2% over the previous year.
Schwank said the passage of another month and a statement from the Revenue Department on April collections will give a better picture of exactly how bleak things really are.
She said, “We will have a full month in with a total shutdown in April’s numbers, and that will be telling.”
The Associated Press contributed to this story. Morning Call reporter Ford Turner can be reached at 717-783-7305 or fturner@mcall.com.
