Proposals will help Gov. Rendell make government live within its means
HARRISBURG, PA — The Commonwealth Foundation joined Senator Bob Regola (R-Westmoreland), Senator Mike Folmer (R-Lebanon), and other members of the Pennsylvania Senate to announce the introduction of the Taxpayer Protection Act and the Taxpayer Protection Amendment.
These statutory and constitutional proposals would limit the annual growth in state government spending to either (a) the average rate of change for the three preceding years of inflation plus state population growth, or (b) the average rate of change for the three preceding years of personal income growth in Pennsylvania, whichever is less. Lawmakers could exceed these limits in the case of declared emergencies or by a two-thirds majority vote in both houses of the General Assembly.
“The Taxpayer Protection Act embodies the economic axiom that you can grow the government or you can grow the economy, but you can’t grow both,” said Matthew J. Brouillette, president of the Commonwealth Foundation and a participant in the news conference.
Brouillette said these proposals are a way to “help Gov. Rendell keep the promise he made to the people of Pennsylvania four years ago in his first inaugural address” in which he said: “We must find a way to make government live within its means.”
Brouillette noted that “if Pennsylvania is the next state to tax, borrow, and spend itself to prosperity, it will also be the first. But nobody can accuse Pennsylvania of not trying.” In the 1990s, only Mississippi outpaced us in the growth rate of government spending on a per capita basis. And this spending trend has continued into this century.
“During Gov. Rendell’s tenure, General Fund spending increased five times faster than increases in the average weekly wage,” said Brouillette. “Today, state government spending is consuming more than 7% more than it did when Gov. Rendell first entered office in 2002.”
While government spending increased at a dramatic rate, Pennsylvania ranked 36th in the nation in job growth, 43rd in income growth, and 43rd in population growth.
Brouillette warned that the “spending lobbies in Harrisburg who benefit from higher taxes and more government spending will fabricate lies and distort the truth about the Taxpayer Protection Act.”
For example, he said that the spending lobbies and their allies in the General Assembly will say spending limits will require cuts in government funding. “The truth is that if this proposal were applied to the upcoming budget, spending could increase—not decrease—by more than $823 million.”
Additionally, Brouillette noted that “the spending lobbies will also tell you that Colorado’s experience with spending limits has been a fiscal disaster. Well, it certainly was for those living at the trough of taxpayer money. But the citizens of Colorado and the economy clearly benefited from restrained government taxing and spending.”
Since Colorado voters first enacted spending limits in 1992, more than $3,200 were returned to the average family of four. In terms of Colorado’s economy, in the 8 years before their spending limit, the median family income growth was 43rd in the nation. Job growth was 33rd, and economic growth per capita was 43rd. But from 1992 to 2005, Colorado’s median family income growth was 7th in the nation. Job growth was 6th, and economic growth per capita was 7th.
“By choosing to limit the annual growth of government, Colorado dramatically grew its economy. Pennsylvania needs to do the same,” concluded Brouillette. “We invite Gov. Rendell to join us as we try to help him keep his pledge to make government live within the taxpayers’ means.”
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The Commonwealth Foundation is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.
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