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The budget surplus is projected to soon run dry in Pennsylvania

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The budget surplus is projected to soon run dry in Pennsylvania


HARRISBURG — Pennsylvania’s multibillion-dollar surplus will soon be halved according to a projection by a state budget watchdog, the result of a long-running structural deficit combined with a growing list of obligations competing for public dollars.

The commonwealth’s recent $47.6 billion budget increased spending by 6%, with more than $1 billion in new money going to public schools in response to a court ruling that found Pennsylvania underfunds poor districts.

However, the state brought in just $44 billion in net revenue last fiscal year. So to afford the spending plan, lawmakers are reaching into the state’s sizable cash reserves, which sat at roughly $13.6 billion as of June 30, according to the Independent Fiscal Office.

That total was roughly split between the state’s rainy day fund — the equivalent of a long-term savings account — and the state’s General Fund. The latter is essentially Pennsylvania’s checking account.

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Lawmakers used $3.3 billion from the General Fund to balance the recent budget, according to the IFO. That money will be spent over the course of this fiscal year.

Pennsylvania will completely deplete the General Fund surplus by the next fiscal year, the IFO estimated based on expected spending, in-progress tax cuts, and revenue projections.

That will force lawmakers to tap into the rainy day fund to balance the budget due less than a year from now if they don’t find new revenue or cut spending.

While fiscal good fortune built the current surplus, Pennsylvania’s policymakers have historically struggled to create new revenue sources as the state’s budget increases annually. This year, Gov. Josh Shapiro pitched regulating slot-like skill games and legalizing recreational marijuana to raise millions in needed dollars, but the divided General Assembly didn’t adopt either.

The rainy day fund currently contains more than $7 billion, up from just $22 million only a few years ago. This meets the level that experts say states should keep on hand. Pulling money out of that fund would require a level of bipartisan support that’s been elusive.

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The IFO’s estimate assumes a 4% increase in state spending in the 2025-26 plan, much of which would pay for contractually required increases in state workers’ wages and benefits and federally mandated human services spending. It assumes education would get only a modest, 2.4% increase in line with inflation.

No one who helped draft the spending plan is saying much about what’ll happen next year to sustain the state’s spending.

Christina Fonseca, spokesperson for state House Appropriations Committee Chair Jordan Harris (D., Philadelphia), said in an email that the IFO report made “certain assumptions to arrive at its conclusions regarding the status of both the Rainy Day and General Fund balances” that the caucus disagreed with.

Fonseca said the caucus supports a financial statement from the Governor’s Budget Office. However, she did not send the statement when asked and did not respond to follow-up questions about what assumptions the caucus disputed.

Matt Knittell, executive director of the IFO, acknowledged the gap between his agency’s projections and the governor’s. Either way, the difference is a matter of degree and not of substance.

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“We both agree there is a substantial deficit,” Knittel said in an email.

For months, Democrats have downplayed the IFO’s recent projections by arguing that the state’s revenue has consistently grown. Speaking to lawmakers during a spring budget hearing, Budget Secretary Uri Monson said the state has averaged almost 4% annual revenue growth over the past 25 years.

“We are very conservative on the projections of where we’re going to be but the actual results have been growing surpluses,” Monson said.

Further spending is likely. Legislative Democrats wanted to appropriate $5.1 billion to underfunded school districts over several years in this budget but only secured $500 million.

Addressing a brewing crisis in public transit funding is a top priority for Shapiro and Democrats this fall. Systems received a one-time boost of $80 million in the recent budget; Shapiro had called for $1.5 billion over the next five years.

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To afford these priorities, they’ll need a lot of new cash — either from new taxes, a booming economy, or another source — or make cuts elsewhere in the budget.

Spending down the surplus has short-term implications as well, said state Rep. Seth Grove (R, York), minority chair of the Appropriations Committee.

The state collects interest on its big surplus — by spending those dollars, that revenue will disappear. The state earned almost $780 million in interest from its cash reserves in the just-finished fiscal year, according to the Department of Revenue — nearly double projections.

Meanwhile, if the general fund gets too low during the year, the state will have to borrow money to pay employees and run other key government functions. While the state isn’t currently in danger of running out of operating money, it has in the recent past. That came with consequences, including a downgraded credit rating.

Grove noted that deficits are less manageable for states than they are for the federal government. “Unfortunately at the state level, we can’t print money,” Grove told reporters early this month.

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The structural deficit — where annual costs exceed annual revenue — isn’t new.

For a decade-plus, Pennsylvania has consistently spent more than it brings in under Democratic and Republican leadership alike. Neither party has mustered the political will to find the right combination of spending cuts, tax increases, or growth-inducing policies to correct the issue.

Instead, the commonwealth’s budget has raised one-time revenues by expanding gambling, taking on debt, or using budgetary tricks that shift costs around to balance the books each year.

Even the current surplus — built on stimulus dollars and unexpectedly high tax revenues — hasn’t led to consistently smooth budgetary sailing, with three straight late budgets in a divided Harrisburg.

State Senate Republicans are typically more open to increased spending than their GOP colleagues in the state House. That dynamic played out again this year, with the upper chamber passing the budget deal with more than two-thirds support. The plan fell a dozen votes shy of the mark in the lower chamber amid widespread GOP opposition.

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Grove, along with his fellow York County Republicans, called the spending plan “reckless” in a news release soon after it passed.

But fellow Republican and chief budget negotiator state Senate Majority Leader Joe Pittman said the budget was a compromise — a product of the realities of divided government.

Pittman had a recommendation for unhappy state House Republicans: “I think they need to get a seat at the table by retaking the majority.”

BEFORE YOU GO… If you learned something from this article, pay it forward and contribute to Spotlight PA at spotlightpa.org/donate. Spotlight PA is funded by foundations and readers like you who are committed to accountability journalism that gets results.



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Ticket from Pennsylvania Lottery’s Triple Six Fix scandal going up for auction

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Ticket from Pennsylvania Lottery’s Triple Six Fix scandal going up for auction


Almost 50 years ago, a Pennsylvania Lottery scandal rocked the commonwealth and captured the attention of the world. Now it’s going up for auction.

Television viewers on Thursday, April 24, 1980, thought they were watching another random lottery drawing when the numbers 666 were drawn. But weeks later, Nick Perry, a local Pittsburgh news reporter and host of the drawing, was charged and convicted of rigging the game. Investigators learned he made some balls heavier than others by adding extra paint to them, tipping the outcome.

That drawing, and the 666 lottery tickets, would go down in infamy. And now, a 46-year-old artifact at the center of the scandal is up for sale. 

John Zenewicz likes to go to estate sales and has a side hustle selling finds on eBay. He said he was at an estate sale in Saxonburg when he saw a 666 ticket sitting on a dresser. 

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“I remember the style of ticket because my dad would buy them when I was a boy,” said John Zenewicz. “And I was like, ‘why would someone encase an old lottery ticket?’ and the only thing that could pop to my mind was that story that I remember. I was 10 years old.”

Zenewicz suspects the homeowners had no idea what they were selling. 

“What I presume, it’s one of the tickets that was probably confiscated as evidence in Nick Perry, what the locals call the Triple Six Fix,” he said.  

After a little more research, Zenewicz said he realized one of the previous owners of the home worked in law enforcement at the time of the scandal. He suspects he may have been part of the team prosecuting Nick Perry. Perry served two years in jail, was fined $3,000 and was ordered to pay $35,000. 

Perry died in 2003, but at least one of the tickets at the center of it all remains. And now, Zenewicz says he is selling his 666 ticket on eBay, giving someone else a chance to own a piece of history.

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How people in Western Pennsylvania can stay safe if they need to be outdoors

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How people in Western Pennsylvania can stay safe if they need to be outdoors


With a toxicity level that is higher than typical air pollution, the thick blanket of smoke from Ontario wildfires currently blanketing a good portion of the East Coast can pose a big risk for those whose jobs don’t allow them to remain inside.

According to the EPA, wildfire smoke contains a mix of gases and tiny particles that can irritate the lungs and airways. In sunlight, some of those gases can also react to form ozone, another harmful air pollutant.

As the Air Quality Index in Pittsburgh reached 240 at 1 p.m. Friday, a UCLA pulmonologist recently told NPR that AQI levels of 100-200 roughly equate to smoking a quarter to half a pack [of cigarettes] a day.

Construction workers, like those on the Commercial Street Bridge project, landscapers or others who work outside for a living and must still venture out, should limit their exposure, wear a mask and limit physical exertion.

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“The N95 mask is absolutely the best way to protect yourself and your lungs,” said Dr. Sally Wenzel, director of the University of Pittsburgh Asthma and Environmental Lung Health Institute at UPMC. “If you can’t do that, a surgical mask would probably be next, but not nearly as good.”

A good fit is important.

“You want to be able to — the way we did during covid — put it on your face, breathe in and get a little bit of a suction feeling,” she said. “The mask should collapse a little bit when you breathe in. You want to have as few empty, open spaces for the air to go through so it has to go through the mask to get to your nose and mouth.”

There is no hard and fast rule on break frequency.

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“The longer you’re ‘exercising,’ the heavier your breathing is going to be and the more you’re going to inhale the stuff that’s out there,” she said. “[Breaks] might allow you to regain a little bit of your energy, not to have to breathe quite as hard as you were at the end of that hour.”

For those who can stay inside, the focus shifts to keeping the smoky air out of the home.

Steve Boehmer, owner of Boehmer Heating and Cooling in Beechview, offers some insight.

“Have a good filter in place, a clean filter,” he said. “Another thing you can do is run your fan all the time. Most people’s thermostats have a fan switch: auto or on. Auto means that the fan runs when the air conditioner runs. If you turn it on, the fan runs all the time. That fan running all the time can make your filter work more of the time, keep the air clean and the particles down.”

Filter choice, he said, is important, too.

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“There are different levels of filters based on their MERV rating,” said Boehmer. “The higher the number, the tighter the weave is and the more particles it can capture. But the higher the rating, the more restrictive the airflow is and it can start to hurt your system. A piece of cardboard is a great filter; it’s not going to let anything through. But it’s not going to let any air through either. So you want to be careful you don’t go too high on that rating.”

The EPA recommends setting the air to recirculate when driving as well.





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Continued Legacy: Central Pennsylvania Auto Auction gears up for 25th anniversary of Classic Car Auction

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Continued Legacy: Central Pennsylvania Auto Auction gears up for 25th anniversary of Classic Car Auction


MILL HALL — This weekend, Central Pennsylvania Auto Auction, 41 Airstrip Dr., Mill Hall, will celebrate the 25th anniversary of its annual Classic Car Auction, welcoming thousands of collectors, buyers and enthusiasts from across the country for two days of bidding, entertainment and celebration. For President Doug Miller, however, the milestone represents far more than classic automobiles.

“It’s kind of like a milestone for us,” Miller said, as he reflected on the anniversary. “Because it’s my dad that started this. We lost him three years ago, and obviously we’re continuing on his legacy and things that he wanted to do. It’s not about the vehicles, it’s not about the auction. It’s just more of continuing on what he would want.”

The collector car event is an extension of the business founded by Miller’s father, Grant, and mother in 1987. While the company is preparing to celebrate 39 years of its weekly dealer-only auto auction in August, the annual collector auction has become a destination event in its own right.

“My father started the company 39 years ago in 1987,” he said. “Over the years, as our sales sort of grew, my father took an interest in antique and collector cars. He would go to other auctions and buy cars and thought, ‘Geez, we have our facility here. We should maybe try and do one of our own.’ So 25 years ago, we set up our collector car auction that we hold, and it’s always been the third weekend in July ever since.”

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This year’s event will feature more than 400 collector vehicles crossing the auction block over two days, along with vintage memorabilia, gas pumps, signs, mini bikes and other automotive collectibles.

While many of the consignments come from Pennsylvania and neighboring states, Miller said the auction’s reputation now stretches far beyond the region.

“We have customers that come from all across the United States,” he said. “The consignments come out of Pennsylvania and the bordering states — New York, New Jersey, Ohio, Maryland, Delaware. We have customers that have sent cars from as far as North Carolina.”

The auction has also become much more than a place to buy and sell classic vehicles.

Thursday evening opens with a complimentary cocktail reception featuring live entertainment at Grant’s Place. The auction begins Friday morning with memorabilia before moving to the collector cars. Friday evening includes a VIP gala with dinner, live music and fireworks.

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“It’s like a celebration, not just an auction,” Miller said. “We like to try to provide some entertainment because we’re obviously in a rural area and it gives the people something to do after the sale’s over.”

The event also brings a significant economic boost to the surrounding community. Hotels fill with visitors, restaurants welcome out-of-town guests and dozens of RV owners make a weekend of the festivities.

“We’ll have upwards to probably a couple thousand people come through our doors over the next three days,” Miller said. “We’ll probably have 30 or 40 RVs across the street that people will set up and spend the weekend camping in our parking lot.”

The celebration comes after months of planning by a team of employees who transform the auction grounds in just a matter of hours. Following Thursday’s regular dealer auction of roughly 750 vehicles, staff immediately begin clearing the lot and staging the hundreds of collector cars.

“We go home to shower and come back basically,” Shanan Miller said with a laugh. “We’re here around the clock.”

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Behind the scenes, nearly 100 employees — full-time and part-time — work together on auction days to keep the operation running smoothly.

“It wouldn’t be possible without our employees,” he said. “It’s a lot of work.”

He added that once the first gavel falls Friday morning, everything falls into place.

“Once Friday morning at 9 o’clock hits, it just sort of takes off,” he said. “It’s on autopilot for the weekend.”

For Doug, the family business has always been about more than selling vehicles.

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After graduating from high school in 1989, he briefly attended college before realizing his passion remained at the auction his father had built. His father insisted he learn every aspect of the business from the ground up.

“He said, ‘If you think for one minute that you’re going to leave school and come here and sit behind a desk and direct orders, that’s not happening,’” Doug recalled. “He said, ‘You’re going to learn every function in this business.’”

So he did.

He started detailing cars, transporting vehicles, picking up litter and plowing snow before eventually moving into management.

“And I still do,” he said with a smile. “If I need to go pick up a load of cars, I can do it.”

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Today, he is passing those same lessons on to his son, Jack Miller, who joined the business full time after the passing of his grandfather.

“I’m doing the same thing with my son, Jack,” Doug said. “He started where I did too.”

In following in their footsteps, Jack hopes to preserve what generations before him have built.

“I just want to continue what my dad has done and my grandfather before him,” Jack said. “Do as good of a job as they’ve done and provide the same level of service that they’ve shown me to provide.”

He believes the relationships built over decades are what keep customers returning.

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“I see how it makes our customers feel,” he said. “I believe that’s a huge part of what brings them back here, week after week if it’s for the regular sale, or every year for the classic auction. Just providing good service and working hard — it feels good to work hard and see a positive end result.”

Doug agreed that philosophy remains the cornerstone of the business his father founded nearly four decades ago.

“One thing my dad taught me is that you need to surround yourself with good people,” he said. “Whether it’s customers or employees, that’s what makes you successful.”

That commitment to service extends to everyone who visits the auction.

“We’re very customer-service driven,” Miller said. “You could sell popsicles, you could sell cars or whatever. It’s all about taking care of your customer. That’s what’s going to get them to come back.”

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As Central Pennsylvania Auction celebrates 25 years of its Classic Car Auction, the event stands as both a showcase of automotive history and a tribute to the family legacy that continues to drive it forward.

For the Miller family, every collector car that rolls across the auction block is another chapter in a story that began with one man’s dream in 1987– and one they hope will continue for generations to come.



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