Philly Sen. Hughes says he’s ‘deathly afraid’ GOP will squander $10B in surplus, federal stimulus

“The silence, I think, from our Republican colleagues is deafening. … We don’t know what they’re going to come out with,” Hughes said during a recent meeting with The Philadelphia Tribune’s editorial board.

Jason Gottesman, spokesman for state House Majority Leader Kerry Benninghoff, R-Centre, told the Philadelphia Tribune that the GOP’s plan will be “reflected in the budget we produce.”

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“Currently, we are going through the guidance from the federal government on how the money can be spent, taking into account the years of deficit spending from the Wolf administration that needs to be addressed in this budget, and making sure we are responsible to taxpayers by not raising taxes in any potential budget plan we put together,” Gottesman said.

State revenues exceed previous estimates by 8.5 percent through May, adding $2.9 billion to state coffers, the Capital-Star previously reported.

The state also is sitting on $7.3 billion in federal pandemic aid passed this year, which must be used to make up for COVID-19 revenue losses or to cover new expenses related to the pandemic, the Capital-Star also reported.

Negotiations between state Democrat and Republican lawmakers are ongoing.

State lawmakers must pass a balanced budget by the end of the month. The new fiscal year starts July 1. The federal funding can be spent over the coming years.

Hughes and McClinton said Democrats have laid out a plan to spend the surplus and federal pandemic stimulus that focuses on small businesses, public infrastructure and workforce development.

Hughes said the state’s revenue surplus combined with the federal pandemic funding was the largest influx of capital into the economy since President Franklin D. Roosevelt.

McClinton said she expected the state to reap high state revenue “for a while.”

“We’re seeing better days ahead, with the federal government literally printing out money, distributing it to not only our state but here in Philadelphia,” McClinton said. Philadelphia will receive a total of $1.4 billion in federal pandemic stimulus funding.

Gov. Tom Wolf, a Democrat, proposed a $37.8 billion spending plan in February that included an income tax increase.

Hughes did not believe a tax increase was necessary due to the revenue surplus. But Hughes and McClinton sidestepped a question about whether they would support Wolf’s tax increase.

“We can’t make that type of commitment on this call,” McClinton said. “It’s too early.”

The state’s healthy finances come a year after state lawmakers passed a piecemeal budget in May 2020 due to a projected deficit due to the economic effects tied to the pandemic.

In November, state lawmakers passed a spending package for the remainder of the fiscal year and plugged a deficit using $3.3 billion in previous federal pandemic stimulus funding and other funding sources.

Michael D’Onofrio is a reporter for the Philadelphia Tribune, where this story first appeared.