2010 Budget Deal Fails to Plan for Future

Harrisburg, PA – Commonwealth Foundation president and CEO Matthew Brouillette released the following statement in response to the announced Pennsylvania state budget deal:

“It’s difficult to negotiate a sane budget with a fiscal madman seated at the other side of the bargaining table. Gov. Rendell was fiscally irresponsible to seek a $1.2 billion spending increase of taxpayer money during the Great Recession, and we commend those Democrats and Republicans who forced him to stop his economic insanity. However, this 2010 spending plan of $28 billion merely puts off the day of financial reckoning caused by years of overspending. It does not put Pennsylvania’s fiscal house in order. In fact, higher spending this year will only exacerbate our financial problems next year.

Had spending growth been held to inflation during Rendell’s tenure, Pennsylvania would be experiencing a surplus of billions of dollars. Instead, next year, the new governor and General Assembly will be forced to deal with a $5 billion structural deficit. Then the pension bomb hits property owners and state taxpayers in 2011, with another $5 billion increase in annual payments. All of Harrisburg’s gimmicks and shell games have been played. The cupboards are bare, and the taxpayers will be forced to fill them with higher taxes.

Legislative leaders and the Governor declared they’ve already “cut to the bone,” yet ignore savings in welfare fraud and waste, as well as $4 billion in unnecessary spending identified by the Commonwealth Foundation’s A Taxpayer’s Budget 2010. Instead of putting Pennsylvania on a path to prosperity, the overspending in this budget will continue to hinder Pennsylvania’s economic recovery in the years to come. It is a tragedy that while Pennsylvanians are losing their pay, health care benefits, and even their jobs, state government keeps growing.

This budget also relies on $850 million in additional funds from the federal government which has yet to pass Congress. According to Senate Majority Leader Dominic Pileggi, ‘No one, including the governor, thinks we’ll receive $850 million.’ Even if it is constitutionally legal to balance a budget with non-existent revenues, is it wise to do so?

Can Gov. Rendell and legislative leaders-who have sworn oaths to uphold both the spirit and intent of the Constitution-agree in good faith to a budget they know fails to meet the balanced-budget requirement of the Constitution? Gov. Rendell says he’ll reduce spending if Congress fails to act. Yet, he has never-not once-reduced spending adequately to match revenue shortfalls. Citizens should not be fooled again by such budget shenanigans and they should demand not only a Constitutionally permissible but a fiscally responsible spending plan for 2010.”

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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.