With very little fanfare, the State Senate is quietly moving a Capital Budget bill into position for a vote. Senate Bill 1054 was reported from the Appropriations Committee yesterday, and could be headed toward action on the Senate Floor at any moment.
The bill would authorize Commonwealth indebtedness of $1.6 billion in the 2011-2012 fiscal year; the amounts are broken out as follows:
- $935 million for buildings and structures
- $10 million for furniture and equipment
- $212 million for transportation assistance projects
- $270 million for redevelopment assistance projects
- $35 million for flood control projects
- $200 million for bridge projects.
So, while all eyes in the beltway are on Congress and the looming vote to raise the nation’s debt ceiling, all seems to be rather quiet on the Pennsylvania front, but we expect that will change soon.
Across Pennsylvania last year, candidate after candidate railed against what he or she perceived as runaway debt and spending under former Governor Ed Rendell. They derided what they viewed as “governing by cardboard check.” No more, they promised.
But the reality of governing has a way of setting in once the campaigns are over. And the reality of the situation is that this state has huge capital needs that are not being met, without even adding in the $3.7 billion transportation infrastructure funding crisis. Further, any attempt to characterize Pennsylvania’s debt as somehow driving the economy into the dumpster is a bit disingenuous.
Pennsylvania’s constitutional debt limit is 1.75 times the average tax revenue over the previous five years. As such, Pennsylvania’s current limit is $58.4 billion. Now, of course, no one is advocating that we get close to that limit anytime soon, but taking on a prudent amount of debt for capital needs is never a bad idea. We chuckle when people compare the PA budget to a household budget. We have news: household budget have debt, too, unless that household paid cash for its actual house. And we should also point out that our Commonwealth’s bond rating is always strong, even during the past recession.
But those points will not stop the debt battle from taking place, especially over the $270 million for Redevelopment Capital Assistance, otherwise known as “RCAP.” There are more than a few members who dislike the way RCAP money is spent, and will no doubt make their feelings known as this bill moves along. But it is important to note that, currently, there is no companion bill to SB 1054 that itemizes projects for the RCAP to be spent upon. There are still billions of dollars in unmet authorizations in existence, and this new $270 million may represent nothing more than a chance to fund some long-suffering projects that received little attention from the Rendell Administration. Still, even existing authorizations are sometimes so broad that new projects can find funding even if there is no new “project bill” accompanying the Capital Budget bill (if you know where to look.)
So as the state budget drama continues to unfold, a new chapter on the debt ceiling is quietly being written. We’ll see what kind of chapter it ends up being when the debate inevitably shifts to the much more unpredictable House of Representatives, and finally, to the desk of Governor Tom Corbett.