PA Revenue Wonks See Red Ink

HARRISBURG (CBS) -- The independent agency that draws up revenue forecasts for Pennsylvania delivered a dose of bad news yesterday.

The Independent Fiscal Office says Pennsylvania looks to come up half a billion dollars short of what's needed to pay bills in the current fiscal year and says under current fiscal policies, that could grow to $1.7 billion dollars in the next fiscal year. On Tuesday, House Majority Leader Dave Reed said Republican leaders want to reduce expenditures first.

"We're going to have to find a way to balance a budget not just this year but next year," Reed said. "And that may take a broader conversation on what we expect government to look like in Pennsylvania… restructuring the government as we know it."

That sets up another potential showdown with Democratic Governor Tom Wolf, who has sought broad-based tax increases to address the state's structural deficit. Wolf will have even bigger Republican majorities to deal with in the next session of the legislature.