Pennsylvania Senate Proposes Spending Diet
Low-growth budget is a step in the right direction, but will House and Governor agree?
HARRISBURG, PA — The Pennsylvania Senate recently passed a state spending plan for the upcoming fiscal year authorizing $27.9 billion in General Fund expenditures. This represents an increase of 2.86% ($775 million) over the 2007-08 budget passed last July. If enacted, this budget would have one of the lowest increases in spending since Governor Rendell took office in 2003.
The Commonwealth Foundation applauded the efforts of the Senate to produce a budget under the limits of the Taxpayer Protection Act (TPA). The TPA would limit spending growth to inflation plus population growth, which would allow an increase of 3.29%, or nearly $894 million, in FY 2008-09.
“Of course, the only way to truly protect taxpayers from tax and spending increases that exceed their ability to pay is through statute and a constitutional amendment,” said Matthew J. Brouillette, president and CEO of the Commonwealth Foundation. Two bills, Senator Mike Folmer’s Senate Bill 707 and Senator Bob Regola’s Senate Bill 7, would place constitutional and statutory limits respectively on the annual growth in state government spending
Brouillette also praised the Senate-passed spending plan because it eliminated most of the “walking around money” (WAMs) used for corporate welfare and legislative pork projects indentified by the Commonwealth Foundation in its February report, Government on a Diet: Spending Tips 2008.
“These WAMs, frequently touted as ‘economic development’ funds, are gateway drugs for politicians who are addicted to spending other peoples’ money,” said Brouillette. “When one member gets a local project funded with state taxpayers’ money, then he or she effectively accepts the pork-barrel projects from the other 252 members of the General Assembly. Eventually these add up to where the taxpayers are forced to underwrite billions of dollars in corporate welfare and special interest handouts.”
The Commonwealth Foundation has long noted the failure of these kinds of programs to improve Pennsylvania’s economy. Abuse of these funds is also apparent, as investigations of former Rep. Mike Veon and several criminal counts against Sen. Vince Fumo for the misuse of WAMs are pending with law enforcement agencies.
“We are glad to see the state Senate recognizes that these sorts of handouts are not a proper role for state government. While there is still plenty of wasteful spending in the budget, eliminating WAMs is a real benefit for taxpayers,” said Brouillette.
In contrast, the House Democrats passed a $28.5 billion budget (a 4.9% increase in spending), which included $203 million in WAMs, and drained the “Rainy Day Fund” of approximately $720 million for future spending.
Although the Senate budget represents a step in a positive direction, Brouillette urged caution. “The final buzzer has not sounded. Last year both the House and Senate passed WAM-free budgets, but the final ‘compromise’ bill added WAMs and increased spending above what either chamber initially voted for. So while the Senate budget is a step in the right direction, continued vigilance is needed to practice fiscal restraint and put state government on a spending diet.”
Brouillette also noted that a great deal of spending occurs outside the General Fund budget. “The state’s total spending for the upcoming fiscal year will likely exceed $60 billion. And this is before Governor Rendell’s plans to hand out corporate welfare to alternative energy companies and his proposals to expand government-run health care are considered.”
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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.
EDITOR’S NOTE: The Pennsylvania Diet Plan is a program designed to help state government shed millions and billions of dollars in unnecessary and wasteful spending of taxpayer money and put the commonwealth back on a path toward fiscal and economic health. For more on the Pennsylvania Diet Plan, visit http://www.padietplan.com/.