State budgets are looking pretty grim nationwide, but especially in PA and MD

CHAMBERSBURG – Both Pennsylvania and Maryland are looking at pretty shaky budgets at the moment. 

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Maryland’s crisis is more in-your-face than PA’s but neither are promising. 

In Maryland, the budget has a deficit of more than $2 billion.

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In Pennsylvania, while there’s been a surplus in the budget in recent years, that is definitely drying up. The $47.6 billion PA budget passed this year with a 6% increase in spending. 

Attorney Clint Barkdoll said, “When you’re talking multi billion dollar annual budget deficits, it has to be a combination of tax increases and/or cuts to programs and/or new streams of revenue. We know in Pennsylvania, it’s probably going to be regulation of skill games and legalized recreational marijuana. Those things will provide big injections of new revenue, but it still won’t be enough to meet the budget deficit unless the General Assembly, or in the case of Maryland, do big cuts to the budget. No one seems to have an appetite to do that. So it’s probably going to be a combination of all three of those things.”

Michele Jansen of NewsTalk 103.7FM pointed out, “I don’t like the idea of pulling on vices to get more revenue. I don’t think that’s healthy for society overall. We know with recreational marijuana, which I know is a huge one for Pennsylvania, and they already have it in Maryland, it seems to be outweighed very quickly by the additional costs of all the social ills you bring about with that, even worse with medical marijuana, because that’s more of the medical issues than that come about.”

Anthony Panasiewicz of NewsTalk 103.7FM suggested, “It’s a slippery slope of, well, you’ve got to regulate the things that are already out there, but also keep promoting it so we can get more tax dollars, right?”

Barkdoll said, “The skill games are low hanging fruit. I’m surprised that it didn’t make it into this year’s budget, because we know that Governor Shapiro talked about it. It seemed like the General Assembly was on board with it. Those games have popped up everywhere. I mean, you can’t go to any restaurant, even grocery stores, you name it now, they’re just everywhere and the state’s not getting any of that money. So I’m sure that’ll happen in 2025, but going back to those budget discussions, and they don’t know for sure how much revenue this would generate, but there were numbers being kicked around of $200 to $300 million a year that that piece could bring in, and that’s a lot of money, but it is nowhere near the billions of dollars in annual budget deficits that are being projected as we get two, three, four years out. So again, that’s one of what may need to be many things that are going to have to be on the table to address that issue.” 

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Jansen said, “I guess when a vice is already being done and it won’t change how much is being done to take some revenue like in the small games of chance, that maybe that makes more sense, although I still feel nervous.” 

Panasiewicz said, “I’m pulling random numbers out. Let’s say you’re making $10 in tax revenue, but you want more and more tax revenue, so you’re going to increasingly promote it, or you’re going to increasingly deregulate it so you can get more money, or something like that.”

Jansen said, “It’s a slippery slope and what I worry about also is what about what Trump is saying? Why don’t we hear more of that from any of these so-called leaders, more productivity, less regulation on real productive business that then can generate a lot more taxes naturally, while also making our communities and societies better, rather than either pull on vices or allow giant spending programs. We were talking about how in Maryland, some are suggesting putting brakes on the Kirwan Commission report, or blueprint, as it’s also known, this ridiculous amount of spending that they want to do on education. Unfortunately, a lot of it is unproven to be shown to actually improve education.” 

Panasiewicz insisted, “It’s throwing dollars at a problem and not fixing it and if you get incremental change, then it’ll get touted as we went up 1% on test scores. Oh, boy.” 

Barkdoll said, “Even at the federal level, we’re going to start seeing this in the very near future, because Trump is right. If we could ramp up manufacturing and internal growth by bringing things on shore, no doubt that would be a huge boost to the economy, tax revenue, employment, that whole list of benefits. The flip side to that is, remember, he wants to eliminate taxes on tips, social security, some of these other programs he’s proposing would cost trillions of dollars over a decade, which might largely offset that growth issue. That’s why he wanted the debt ceiling lifted now for four years, so that it doesn’t get in the way of a lot of these programs. So I guess the point is, it seems like the government at all levels, federal, state, local level, I was struck by some of these local budgets that were recently passed, the reserve funds have been completely exhausted. They’re down to their bare bone minimum reserve fund that’s recommended by the state. There’s nothing left. They’ve gone through all of that ARPA and stimulus money. That’s a problem. As we were talking about a couple weeks ago, you can’t just keep going year after year of deficit spending without this catching up to you and when it catches up, something’s going to have to give. You’re going to have to cut programs, raise taxes or find new ways of revenue, and none of those things are easy.”