Independent Fiscal Office Economic and Budget Outlook, Fiscal Years 2024-2025 through 2029-2030
IFO - File Download

"This report examines the factors that will impact the Commonwealth’s fiscal condition through fiscal year (FY) 2029-30 under current laws and policies. For FY 2024-25, the report finds an operating deficit of $3.4 billion (roughly $335 million higher than the official budget approved in June). Through October, revenues have slightly outperformed the IFO’s June 2024 forecast, but strong refunds (up $288 million from the prior year) more than offset those revenue gains.

From FY 2024-25, the deficit expands to $6.7 billion by FY 2029-30 as projected expenditure growth (3.4% per annum) outpaces revenue growth (2.2% per annum). The modest revenue growth is attributable to the on-going corporate tax rate reduction, a projected national profits slowdown and a contraction in Treasury earnings (i.e., interest earned on the General Fund surplus). Excluding corporate net income tax and Treasury earnings, General Fund revenues expand at roughly the same rate as expenditures. During the forecast period, the deficit expands by $3.2 billion, and $2.0 billion could be attributed to the revenue impact of policy relative to the FY 2024-25 base year."

The structural deficit is real.  The past two adopted budgets has relied on one-time funding sources to fund recurring costs without addressing any cost drivers.  While I suspect the next budget will be funded through budget gimmicks (delayed payments, using the remaining general fund balance, raiding the rainy day fund, other one-time revenue sources) while increasing spending well about available recurring revenues, there is another path.

These financial reforms are geared to eliminate the structural deficit through proven budgeting practices and provide greater transparency on our Commonwealth's finances. 

I hope you will join me in becoming a deficit hawk (Deficit hawk is a political slang term in the English speaking world for people who place great emphasis on keeping government budgets under control).

Statutes/Laws affected:
Printer's No. 0194: P.L.177, No.175