With all the pandemic-related economic disruptions of 2020, many Americans are relying on the federal government — particularly stimulus checks and SBA loans — to offer financial relief. Unfortunately, state governments have adopted the same approach, relying on federal borrowing — and massively increased deficit spending — to fund their expenditures.
This year’s widespread business closures and unemployment have resulted in state tax revenue shortages, despite the CARES Act funding they received. While CARES Act funds were intended to deal with direct COVID-related costs, many states are simply looking for a “free” way to fund their own excessive spending. Some states are even lobbying for more federal taxpayer aid.
Earlier this year, in Pennsylvania, lawmakers worked with Governor Tom Wolf to pass a stopgap budget that made post-COVID state spending adjustments. Then, two weeks after the election, they completed the 2020 budget during the lame duck session. But with a $3 billion shortage to make up, lawmakers unfortunately made only a halfhearted effort toward financial solvency, opting instead to rely on questionable federal aid, overlook the state’s real needs, and pave the way for crushing tax hikes.
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