Senator Wagner Comments on Mid-Year Budget Briefing

(Harrisburg, PA) – State Senator Scott Wagner (R-28) this morning reacted to comments made yesterday regarding the financial situation of the Commonwealth and the mid-year budget briefing by Budget Secretary Zogby.

“I’ve been sitting back listening to my colleagues on the other side of the aisle, and unfortunately it is apparent that none of them understand how the finances of a business operate,” Wagner commented. “The Commonwealth is identical to an operating business where there is revenue and there are expenses. As an owner and operator of multiple businesses, I fully understand that my business enterprises would not be able to operate without an operating line of credit from a bank. The Commonwealth has revenue of approximately $30 billion per year. Any experienced business operator or chief financial officer would agree that the Commonwealth of Pennsylvania should have an operating line of credit equivalent to 60 days of average revenue, which would be an operating line of credit of approximately $5 billion.”

“As a private sector business owner, I know how to manage a budget and what factors will impact the budget. The Democrats are trying to spin the budget issue to scare the public into thinking the only solution is more tax increases, when in reality, revenue comes in at different times throughout the year. The $2 billion deficit is not unrealistic at this time of year. A large portion of the revenue that comes into the Commonwealth is received between January 1st and April 15th through payments for PA State Income Tax.”

“Many Democrats are using the budget discussion as an opportunity to grand-stand politically and criticize Governor Corbett for the equivalent of borrowing against a line of credit to cover revenues that are slower at the end of the year. Any private sector business operator needs to understand cash flow into and out of their business.  Businesses routinely operate with lines of credit. This is what businesses do – and if some of the critics would have ever signed the front of a paycheck rather than the back, they might possibly have a better understanding of cash flow, borrowing money and cycles throughout the year that affect cash flow.”

Senator Wagner also points out that the winter we experienced earlier this year was the worst winter that many businesses have seen in 30 years, and this impacted revenues to the Commonwealth.

Senator Wagner commented that at one of his companies this past winter they spent approximately $50,000 on snow removal, which is more than double of any year that the company spent over the last 15 years. I would be curious to know how much additional expense the Commonwealth spent on snow removal at Commonwealth owned or leased facilities throughout the state.

Senator Wagner points out that in a three month period during the severe winter we just experienced, if car dealers in all 67 counties throughout Pennsylvania sold 500 less vehicles per county on an average, that would equal 33,500 less vehicles sold. Factoring transaction value of $25,000 per vehicle times 33,500 vehicles would result in lost revenue of $837,500,000 to the car dealers. Sales tax of 6% lost to the Commonwealth on revenue of $837,500,000 would equal $50,250,000.

“Many people who had planned on purchasing a new vehicle during the winter may have had to cancel their vehicle purchase to replace a roof, spouting, or a new furnace because of the severe winter we just experienced.”

“The bottom line is this: many of my colleagues on the other side of the aisle just don’t understand the complexities to operate a business and this unfortunately means that they struggle to understand economics,” Wagner further explained. “We face a deficit next year because costs continue to climb for pensions, human services, corrections, and debt.”

“For the last four years, Democrats could have worked with Governor Corbett to solve these daunting issues and instead chose to do what they’re doing now – distorting the facts and complaining without offering solutions. Governor Wolf, yesterday, to his credit, chose to delay actions and wait until he gets to spend some time reviewing the budget in depth before offering any commentary.”

Senator Wagner states, “I continue to stand by my statement that Pennsylvania does not have a revenue problem, it has a spending and expense problem.”

“For the benefit of all of Pennsylvania, the Democrats need to step up to the table and begin working on actually fixing problems rather than just criticizing and grand-standing politically.”


Erin Marsicano
(717) 787-3817