State Budget vs Spending Limits

Last week, the Pennsylvania State Senate passed a budget representing $27.66 in General Fund spending. How does that stack up against inflation and population growth?

If state spending limits like the Taxpayer Protection Act had been in place since 2002, allowing spending to increase with inflation and population growth, General Fund fund spending would be $26.8 billion next year.

The Senate budget represents $800 million more than that (Gov. Corbett’s proposal about $300 million above that threshold). When including the sales tax for the Public Transportation Fund—spending that was part of the General Fund in 2002, but was move to a new fund in 2007, and would be covered under all versions of TPA—the Senate budget proposal would exceed the limit by $1.2 billion.

More importantly, had the TPA been around over that decade, spending would have increased at a steady pace. Taxpayers would have kept billions of their own dollars—almost $8,000 per family of four, just by limiting General Fund growth. And the spending cuts of the past few years—even the federal stimulus subsidies that were used to balance the budget—would have been unnecessary.