Standing with Taxpayers
FEBRUARY 6, 2013 | Commentary by NATHAN BENEFIELD
Most Pennsylvanians probably weren't aware – or don't care – that Governor Corbett delivered his 2013-14 budget proposal this week. But they should! Spending $20,900 per family of four, the decisions of Harrisburg politicians affect every household across the commonwealth. Yet over the next few months, it is not taxpayers, but special interest groups who financially benefit from taxpayer-funded subsidies that will descend upon the state capitol with rallies and hired lobbyists demanding more.
How will taxpayers compete with these special interests? Pennsylvania families have no such lobbyists working on their behalf, and few have the luxury of taking time off work or away from their families to travel to Harrisburg. Like the Biblical David taking on the Goliath of Big Government, in this battle the hardworking taxpayers of the commonwealth have only a few small stones to cast.
Lawmakers must choose who they will stand with. But if they want to put taxpayers first, here are a few principles to equip them.
Produce a sustainable budget: Spending has exceeded state revenues in each of the last five state budgets. By using temporary federal stimulus dollars, exhausting the state's "rainy day fund," and taking money from other one-time sources, lawmakers have lived beyond their means. Even the current year's budget spends $239 million more than the state will collect in revenues.
This trend cannot continue. Like any family trying to live within their means, lawmakers need to act now to bring spending in line with revenues. The Independent Fiscal Office predicts that unless we change course, the budget shortfall will reach $2.2 billion by 2018.
Prioritize government spending: Gov. Corbett's proposal to privatize the government-run wine and liquor stores will get government out of the business of selling, marketing, and producing wine and liquor, and restore it to its proper role of enforcing liquor laws. Pennsylvanians are tired of an archaic and inefficient system and ready for 21st century changes.
Protect taxpayers now and in the future: Over the next few years, taxpayers' contributions towards government pensions at the state and school district level will rise by nearly $1,000 per household. These pension costs will consume a growing share of state, school and local tax dollars. While Governor Corbett's proposed reforms will stop the bleeding and create a retirement system with affordable and predictable costs for future government workers, more will need to be done to defuse the ticking pension time bomb.
By recommending against expanding Medicaid, Gov. Corbett further protects taxpayers. Medicaid expansion under the Affordable Care Act would cost state taxpayers an additional $1.3 to $5.5 billion over the next eight years – with the rest paid for with federal tax hikes hitting Pennsylvania families. Moreover, Medicaid provides poor quality of care and long wait times to those it is intended to serve and shifts costs to families with private insurance. Pennsylvanians simply can't afford to finance this failing system.
Preserve job growth: Government cannot create jobs; government policy can encourage or hinder robust private sector economic growth.
Already, Gov. Corbett's fiscal restraint has helped Pennsylvania's economy recover from our national recession, resulting in thousands of new jobs for Pennsylvanians seeking employment. Critics point to a state unemployment rate higher than the national average, but this stems from an explosion in the number of those re-entering the workforce in Pennsylvania. Over the past year, Pennsylvania's labor force grew at a rate 17 times that of the other 49 states. Compare this to a loss of 137,000 jobs in Gov. Rendell's second term, filled with bloated budgets, tax hikes, and additional debt. The lesson? You can grow the government or you can grow the economy, but you can't grow both.
Improving our economy further, Gov. Corbett's proposal to lower Pennsylvania's onerous corporate income tax – amongst the highest in the world – will reduce burdens on Pennsylvania business owners and help open the doors to new businesses. Even better, if lawmakers were willing to eliminate all corporate welfare, this tax relief could happen sooner, bringing an immediate boost to Pennsylvania's economy and creating more well-paying jobs.
Spending plans designed in Harrisburg affect real families across our commonwealth. So while special interests clamor for more taxpayer money, lawmakers will be challenged to stand strong with taxpayers in their spending decisions.
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Nathan A. Benefield is director of policy analysis for Commonwealth Foundation, (www.CommonwealthFoundation.org)Pennsylvania's free-market think tank.
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