Last week in his remarks at the Pennsylvania Press Club, Sen. Jake Corman endorsed the idea of spending limits for Pennsylvania state government. Corman expressed support for Sen. Mike Folmer’s proposed legislation, similar to Colorado’s Taxpayer Bill of Rights (TABOR), which returned billions to taxpayers and fostered an economic boom in the Centennial State. Pennsylvania Independent takes a look at Sen. Corman’s remarks, and the implications for Pennsylvania.
In addition to Sen. Folmer’s proposed Taxpayer Protection Act (SB 7), two similar proposals have been introduced in the House: HB 974, sponsored by Rep. Scott Perry, and HB 116, sponsored by Rep. Tim Krieger, which would amend the state constitution to limit future spending.
Spending limits are needed, as we’ve pointed out before, because lawmakers work under perverse incentives to spend every dollar available to them in good times, resulting in unsustainable growth in spending and tax increases (or in rare cases, spending cuts) during recessions. Indeed, the budget passed by the State Senate this month spends $300 million more than expected revenues, using up much of the state’s fund balance.
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 spending would be $26.8 billion next year. Moreover, spending would have increased at a steady, sustainable rate, and taxpayers would have kept billions of their own dollars—almost $8,000 per family of four.
For more on spending limits, check out our BudgetFacts: State Spending Limits for Pennsylvania.