Pennsylvania IFO Warns Structural Deficit Could Hit $7 Billion by 2030
Pennsylvania's Independent Fiscal Office projects the commonwealth's structural deficit could exceed $7 billion by 2030, up from more than $4.5 billion last fiscal year, unless lawmakers cut spending or find new recurring revenue. IFO Director Matthew Knittel said temporary measures used to balance past budgets, including a "cycle roll" that delayed two months of Medicaid managed care organization payments into the next budget cycle to show $2.6 billion in paper savings, are largely exhausted. The office also flagged that an aging population will shrink the working-age and school-age cohorts while increasing healthcare and other spending, and cautioned against relying on uncertain projected revenue from taxing cannabis or skill games. The report was presented Thursday as Democrats prepare for their first budget negotiations holding majorities in both chambers of the general assembly.