PITTSBURGH POST – GAZETTE: Pennsylvania faces a long-term structural deficit and will enter next year’s budget deliberations without the financial cushion that helped policymakers manage the past three years, according to an economic outlook released last week by the state Independent Fiscal Office.
The IFO, a nonpartisan office created in 2010, projects that if state laws were to remain unchanged, Pennsylvania’s revenues over the next five years would increase at an average annual rate of 3.1 percent, failing to keep up with a 4.1 percent average annual rate of growth in expenditures.
The projected disparity is based in part on forecasts that the population of Pennsylvanians 65 and older will increase 29 percent between 2010 and 2020, while the state’s working-age population will remain unchanged. These demographic trends could limit growth in the personal income tax base and in the sales tax base, as older people tend to spend more of their disposable income on non-taxable goods and services, such as health care, the report noted… (more)
