Center for Taxes & Fiscal Responsibility
The Center for Taxes & Fiscal Responsibility works to reduce the size, scope, and “tax-take” of state government; restore the government sector to its proper and limited role in our lives; and make government more open, transparent, and accountable to citizens.
Paul Battista told a Congressional subcommittee last year: “We can now pay a higher family-sustaining wage! We have people working for us that are the primary breadwinners of their household.” But each year, Paul’s family business—and that of countless job creators—is threatened by efforts to bolster school funding by raising business taxes.
Today, credit rating agency Moody’s downgraded Pennsylvania’s general obligation bond rating from Aa2 to Aa3, citing the state’s use of one-time budgetary stop-gap measures and the continued underfunding of public pensions. This marks the third credit downgrade from ratings agencies in as many years.
A contentious budget season has officially ended after Governor Corbett signed a $29 billion appropriations bill into law. But is it fiscally responsible? And what’s holding up reforms on the major issues, like pension reform, facing taxpayers across the state?
Today, the governor identified the special interests that oppose any kind of fiscally responsible pension reform: government union leaders,” commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. “That Gov. Corbett feels a line-item veto is needed to force action on this issue illustrates the immense power these government union executives wield in Harrisburg.
While state lawmakers approved a state budget without enacting pension reform, Detroit’s failure to address the same issue illustrates the painful consequences of inaction—a proposed 4.5 percent cut in benefits for retirees.
July 1, 2014, Harrisburg, Pa—Yesterday, Gov. Corbett withheld his signature from the state budget in a bold attempt to force action on substantive pension reform. Today, despite near-universal acknowledgement of a looming pension crisis, the House pension vehicle was sent back to committee—a move backed by government union leaders.
Yesterday, the Pennsylvania House of Representatives advanced a no-tax-increase budget bill. Crucially, this bill addresses funding gaps without relying on more revenue from Pennsylvanians already shouldering the 10th highest tax burden in the country.
For the seventh consecutive year, Pennsylvania state government is projected to spend more money than it collects in taxes. Facing a deficit of nearly $1.3 billion, families may be asked to fork over more of their hard earned money to balance the budget. We can’t afford to continue down this road.
At more than $50 billion in debt our pension plans for state and school workers are among the worst funded in the country. Without reform, Pennsylvanians face cuts to services, teacher layoffs, higher property taxes, and even seeing cities go bankrupt. These dire threats make pension reform urgent.
Standard & Poor’s recently issued a stern warning that they would lower Pennsylvania’s bond rating—making it more expensive for the state to borrow money—unless they “adopt meaningful pension reform.” This worries Steve Calabro, a public school teacher and participant in the public pension system, who says, “Without a fix, this is going to decline rather quickly and something drastic is going to happen.”
Total Records: 483
Who are We?
The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.