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Budget Secretary Says State Facing Steep Deficit

Budget Secretary Zogby this week gave a mid-year budget briefing, saying the state needs to not only prepare for an expected revenue shortfall of at least $500 million this fiscal year, but also a projected $800 million in mandatory state spending increases for the coming fiscal year.

Zogby went on to say that the Governor must act now to correct this shortfall, and that the Administration will not spend any more money in the coming fiscal year than what is deemed mandatory spending.

Zogby suggested that the Governor’s upcoming budget proposal would be flat in spending, aside from the $800 million in mandatory increases on items such as state employee pensions, debt service, and Medicaid.

He said he expects the state to start the 2012-13 fiscal year $746 million short of a balanced budget – and that is with a flat-spending starting point with no budgetary alterations. Zogby reiterated that the governor intends to keep to his no tax increase rule, so any additional revenues would have to come from spending cuts.

Later, House and Senate Democrats held a press conference and claimed that the Corbett Administration is “creating a crisis” by overreaching the “revenue shortfall” in order to push for “needlessly painful cuts next year.”

While Senate Leadership said that the numbers were “manipulated…to create an appearance of revenue shortfall,” Zogby denied those accusations. He said, “If you just think about the logic of it all, that somehow we’re setting this up to have these revenues come in below estimate – to me, as if there’s some perverse…joy that we get from shortfalls and cuts – these are very difficult and painful things.”