10 Ways to Balance the Budget Without Tax Hikes

Contrary to the Governor’s rhetoric, there are a plethora of reforms and spending cuts that can balance the budget without firing our police, evicting our elderly, or dumbing down our kids. Below we offer our ten ways to balance the state budget, this year and the years to come, without raising taxes.

  1. Eliminate corporate welfare. The Governor’s latest General Fund budget contains over $410 million in corporate welfare.
  2. Eliminate, privatize, or implement user fees for “private goods” – such as museums, parks, and the arts. The Governor’s budget spends almost $500 million to maintain non-core functions of state government.
  3. Control self-service government programs expenses like legislative leadership accounts used to fund illegal bonuses. A number of state programs and expenditures work to benefit of government official and the detriment of citizens. Rendell’s revised General Fund budget about $200 million on self-benefiting expenses.
  4. Reform Medicaid by giving individuals more control over their health care spending.
  5. Limit the increase in basic and special education funding to 11.7%. This increase would give school districts their highest level of funding in Pennsylvania history. Over the past 25 years, per-pupil spending has increased 364% (inflation of 141%) while achievement has stagnated.
  6. Repeal prevailing wage laws for government construction contracts. This unnecessary regulation inflates costs by 10-30% and increased the cost for state and local government by almost $9 billion in 2007.
  7. Reform government pensions by moving from a defined benefit to a more predictable defined contribution plan.
  8. Reduce advertising budgets for the state lottery ($32 million), tourism ($26 million) and the film tax credit ($576,000, which at $75 million, we should eliminate). Do we really need a groundhog on TV (and facebook) convincing us to gamble, or a psychedelic website to remind us that Feb. 2 is Groundhog Day?
  9. Increase state spending transparency and accountability. Creating an online spending database, like HB 1460 would create savings, as demonstrated in other states, and will discourage the misuse of tax dollars in programs like WAMs.
  10. Privatize state-run businesses, such as the state liquor stores. Competitively contracting out all Liquor Control Board operations could produce a one time influx of $1.7 billion, increase future revenues through corporate and property taxes, and provide better service to consumers.

Over 80 state lawmakers agree with us, saying YES WE CAN balance the budget without raising taxes. Find out what your legislator thinks.

The rest of our suggested spending cuts, totaling $5 billion, are detailed in Government on a Diet: Spending Tips 2009.