Executive Summary

The Pennsylvania Piglet Book 2006 is the joint effort of the Commonwealth Foundation and Citizens Against Government Waste (CAGW) to make the citizens of the Commonwealth of Pennsylvania aware of wasteful spending of their tax dollars in the annual state budget. The Piglet Book identifies programs of greatest waste in the 2005-06 Pennsylvania budget and Governor Ed Rendell’s 2006-07 proposed budget. It identifies cuts that should be made, and encourages lawmakers to focus government spending only on those core functions that truly serve the public good.

State government spending has grown far beyond its means, and has become more burdensome on Pennsylvania taxpayers.

• Since 1970, Pennsylvania’s operating budget has increased from $4.2 billion to a proposed $54 billion in 2006-07, an inflation adjusted increase of 160 percent.
• The state’s operating budget as a share of personal income rose from 8.8 percent in 1970-71 to 12.5 percent in 2005-06—an increase of more than 42 percent.
• Governor Ed Rendell proposes to increase state operating spending to a level 23 percent higher than when he took office, more than double the 9.2 percent increase in the rate of inflation during his tenure (2002-2005).

State government’s consumption of larger amounts of Pennsylvania’s personal income has failed to improve Pennsylvania’s economy or general well-being. The collection of taxes and fees and the administration of government programs have become drains on the economy. Despite spending billions on “economic development” programs (by both Democratic and Republican Administrations), the state economy continues to lag behind the rest of the nation.

• From 1970 to 2005, Pennsylvania ranked 49th in job growth, 46th in state personal income growth, and 47th in population growth.
• During Governor Ed Rendell’s tenure (2002-2005), Pennsylvania ranked 38th in job growth, 43rd in state personal income growth, and 43rd in population growth. If employment in the state had grown at the same rate as the rest of the nation between December 2002 and December 2005, the state would have 50,000 more jobs.

While Governor Rendell claims his administration is “squeezing every nickel out of government,” the Pennsylvania Piglet Book 2006 identifies numerous areas where cuts can be made. The suggested reductions, in operating expenses alone, represent more than $675 annually for a family of four in Pennsylvania. The capital budget and off-budget “independent agencies” contain additional wasteful spending, often through issuing debt for future taxpayers. The programs represent billions in wasteful spending and extend the intrusion of government further into the daily lives of Pennsylvanians.

Waste, “WAMs,” and Corporate Welfare

The Pennsylvania Piglet Book 2006 identifies:

• $3.7 billion in waste, “walking around money,” and corporate welfare in Pennsylvania’s total state government spending for FY 2005-06.
  • $2.1 billion in the Operating Budget
  • $859 million in “General Fund” budget spending.
  • $1.3 billion in “other” operating budget spending.
  • $1.6 billion in off-budget spending (bond issues and spending by “independent agencies”).
• $4.3 billion in waste, “walking around money,” and corporate welfare in Pennsylvania’s total state government spending in Governor Ed Rendell’s proposed FY 2006-07 spending plan.
  • $2 billion in the Operating Budget.
  • $873 million in “General Fund” budget spending.
  • $1.1 billion in “other” operating budget spending.
  • $2.3 billion in off-budget spending (bond issues and spending by “independent agencies”).

The Pennsylvania Piglet Book 2006 is not a comprehensive analysis of every possible savings opportunity for the Commonwealth—such an effort would require detailing the billions of dollars which could be saved through competitive contracting or privatization of core services that could be better provided by the private sector, reducing burdensome regulations and prevailing wage laws, and adopting other cost-saving measures which are standard in the private sector. Rather, this analysis focuses on programs and services which are wasteful by their very nature—programs which government should get out of the practice of managing and funding altogether. The Pennsylvania Piglet Book 2006 addresses four categories of wasteful programs:

Corporate Welfare and Discriminatory Programs

• These programs award tax dollars to individual companies at the expense of all taxpayers.
• The Piglet Book 2006 identifies 53 budget items as corporate welfare, totaling $428 million in the 2005-06 operating budget and $373 million from the 2006-07 proposed operating budget.
  • The $30 million awarded by the state to PNC Bank to build a new office, condominium, and retail section in Pittsburgh would qualify as corporate welfare.

Private Goods

• These programs and services are activities that state government should not engage in, and those which compete with the private sector.
• The Piglet Book 2006 identifies 27 programs as private goods, which account for $694 million in wasteful spending for fiscal year 2005-06 and a proposed $818 million for 2006-07.
  • Taxpayer-financed Grants to the Arts ($15 million in 2005-06) and support of specific museums ($11 million in 2005-06) were categorized as programs or services that should be provided by the private, not public, sector.

Superfluous, Unnecessary and Paternalistic Programs

• These programs represent a paternalistic belief that state government must care for the public like children.
• The Piglet Book 2006 identifies 46 paternalistic programs, costing taxpayers $227 million in 2005-06 and a proposed $244 million in 2006-07.
  • Programs such as regulation of auctioneers, barbers, cosmetologists, and funeral directors, were identified as paternalistic.

Gratuitous Spending and Perverse Incentives

• These programs encourage even more government waste and extravagance.
• The Piglet Book 2006 identifies 24 gratuitous budget items, accounting for $794 million in 2005-06 and a proposed $603 million in 2006-07.
  • Bloated expense accounts for lawmakers and judges were among the programs identified as gratuitous.

The Pennsylvania Piglet Book 2006, by identifying potential cuts in the state budget and attempting to bring attention to wasteful spending, is designed to bring a renewed focus on the proper functions of state government and restore it to its proper sphere.

With a host of hearings, meetings, and votes on the 2006-07 budget over the next several weeks, the Pennsylvania General Assembly has the opportunity to address the most egregious examples of government waste. Rather than rubber-stamp every proposal coming from the Governor and the various departments, legislators need to consider the average taxpayer, limit government to its core functions, and spend tax dollars only on those programs which truly provide for the “general good” of Pennsylvanians.

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The Pennsylvania Piglet Book 2006 can be acccessed here [1] (PDF, 3.3MB).