PA In The Company Of States Expected To End Their Fiscal Year With A Budget Surplus.

Allentown Morning Call

When they return to work later this month, Pennsylvania lawmakers will begin the 2013 legisaltive session with a projected $478 million budget surplus, but demands, including mounting pension costs and the potential expansion of the state’s Medicaidrolls, loom.

But they’re not alone. Legislatures in other states will similarly begin their 2013 sessions with cash balances, but with plenty of demands on where that money should be spent.

In Indiana, for instance, Gov.-Elect Mike Pence will take office with $500 million budget surplus and $2 billion in cash reserves. He’s pledged to give some of that money back by cutting Hoosier State’s personal income tax, reported.

Elsewhere, Iowa expects to finish its fiscal year $800 million to the good, while Florida boasts a $400 million surplus. In Michigan, lawmakers have an extra $1 billion in their general fund, Stateline reported.

“States aren’t talking about new extravagant array of new programs,” Sujit M. CanagaRetna, a senior fiscal analyst at the Council of State Governments toldStateline. “State Medicaid bills are continuing to surge, so whatever little surplus states might have generated will likely go back into that”

As of last month, Pennsylvania tax collections were running $171.5 million ahead of estimate, according to state Department of Revenue data. Collections for December, totaled $2.4 billion, which was $112.4 million, or 4.8 percent more, than anticipated.

But an explosion in public pension costs, to the tune of about $511 million ($403 million for school employees’ retirement and $108 million for state employees’ retirement that agencies must absorb) could eat up whatever excess revenue the state has at the end of the current fiscal year.

The state also expects to spend about $650 million in Medicaid in the fiscal year that starts July 1, according to Budget Office data. The two make up the biggest cost-drivers in the new fiscal year.

In Tennessee, GOP Gov. Bill Haslam has said his state’s $580 milion surplus will be largely eaten up by an expansion of the state’s TennCare rolls, as that state’s Medicaid program is known. About 60,000 residents are expected to join the rolls as a result of the ObamaCare expansion, Stateline reported.

Last November, Pennsylvania Gov. Tom Corbett took heat on newspaper editorial pages for saying he didn’t think the state could absorb the $178 million tab to cover 600,000 Medicaid recipients. While opposed, the Republican administration has yet to make a final call.

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