The commonwealth’s surplus is split between its rainy day fund, which is essentially a long-term savings account that requires a two-thirds vote of the legislature to tap, and its general fund. The latter is effectively its main checking account and accrues most state tax revenue.

Experts have said that states should keep about 12% to 15% of their total annual costs in a rainy-day fund; this year, the target would be about $7 billion in Pennsylvania. But just five years ago, it contained only $22 million - enough to run the state government for just a few hours.

The fund was depleted during the Great Recession under Democratic Gov. Ed Rendell. After federal stimulus dollars ran out, lawmakers struggled during Republican Gov. Tom Corbett’s four years in office and Democrat Tom Wolf’s first term to balance the budget.

Corbett, who had pledged not to raise taxes, largely tried to deal with the financial situation by supporting spending cuts.

The enacted cuts included a 10% reduction in funding for county human services, and, most significantly, a $1 billion reduction in funding for education. Corbett and his allies argued the latter was necessary because the Rendell administration had used stimulus money to prop up the budget. Regardless, the strategy made Corbett unpopular and he lost his reelection bid to Wolf.

New taxes or increases to existing ones have played a small role in solving recent budget woes. Wolf proposed increasing the state’s flat income tax rate and taxing natural gas drillers by the volume of gas extracted, but the then-GOP-controlled legislature didn’t bite.

Instead, Wolf and the legislature balanced the books and raised one-time revenue through a mix of temporary solutions, like issuing new casino licenses and borrowing against the state’s share of tobacco settlement revenue.

The state has also delayed payments or purposefully undercounted projected Medicaid expenses to appear to balance annual budgets.

The commonwealth’s budgeting strategies between 2015 and 2019, which often amounted to moving money around or taking on debt, were sharply criticized in a 2021 report from the Volcker Alliance. The report highlighted the commonwealth’s reliance on what the group termed “budget maneuvers.”

“To avoid creating long-term structural deficits that burden future budgets, states should pay for expenditures with recurring revenues earned the same year,” the report said. “Budget maneuvers are states’ major tool for moving budgeted costs to the future or bringing expected revenues into the current year.”

These are actions taken consistently by “particularly challenged states,” the report said, and it ranked Pennsylvania as the single worst “maneuver” offender. The average grade for states in this category was a B; Pennsylvania received the sole D-minus in the nation.

The commonwealth’s use of debt during its tight budget years wasn’t just fiscally dicey - it may have been unlawful, although no one challenged it at the time.

Unlike the federal government, which typically runs deficits in its yearly spending, the Pennsylvania Constitution says that the commonwealth can only go into debt to “suppress insurrection,” “rehabilitate areas affected by man-made or natural disaster,” or pay for capital projects. All other uses of debt must be approved by voters through a referendum.