Free Enterprise and Taxpayer Protection Act

An issue the Commonwealth Foundation has weighed in on, government “enterprises” that compete with private businesses. Read more about it here. Below is the story on yesterday’s hearing on the topic in the Senate Finance Committee.

Government competition in marketplace explored by Senate panel.
By Cate McKissick

HARRISBURG (April 26) – The Senate Finance Committee grappled with what role the government should play in the marketplace during an informational hearing Wednesday.

Testimony was heard on legislation that would create the Free Enterprise and Taxpayer Protection Act ( SB930 ), limiting state and local governments’ roles in competing with private businesses within the state. SB930 would also encompass state-owned or state-related universities, community colleges and school districts.

According to the bill, government entities undertaking commercial activities must make a “good faith” effort to show that they are not directly competing with a private enterprise.

“I have a very conservative philosophy about what the role of government should be,” finance committee Chairwoman Jane Earll, R-Erie, said after the hearing. “We can’t be everything to everybody, providing every service everyone wants.”

Earll did say she felt governments should be providing “core” functions: transportation, public health and safety, and quality education, but not “running golf courses.”

Appearing before the committee were business owners who support the act, stating that government-owned and operated businesses unfairly compete with private businesses.

“Government-operated businesses do not pay any taxes of any kind,” said John F. Brinson, chairman of the Lehigh Valley Tax Limitation Committee, and a small-business owner. “Government-operated businesses always lose money, which must be made up by more taxpayer dollars. Yes, they always lose money when expenses are properly accounted for and allocated, including the costs of government employee wages, health insurance, pensions and other benefits.”

Brinson also said there was a basic unfairness in government entities taking tax dollars to create businesses that compete with the taxpayer.

“It’s just plain wrong,” he said.

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