Simple Solutions for Significant State Savings

Pennsylvania is plagued with budget challenges, but these challenges don’t have to defeat us. We have solutions aimed at improving PA’s fiscal health while growing its economy. 

In previous blog posts, we’ve outlined the need to repair individual welfare programs and eliminate corporate welfare, but there are plenty of other areas in the budget ripe for reform. Below are just a few of our recommended solutions to help protect taxpayers from the consequences of fiscal irresponsibility. 

Redirect money from the Legislative Reserve Fund: To alleviate short-term fiscal pressures, and eliminate the need to increase taxes on families, part of the Reserve Fund should be returned to the General Fund.

The General Assembly currently lacks a formal policy to determine the appropriate amount of the Legislature’s financial reserve. An audit of legislative spending highlighted clerical errors such as: summarized credit card receipts, lack of purchase specificity (which led to unnecessary spending on items from parking tickets to dinners), and unidentified employees collecting salaries above the maximum pay guidelines.

This money would be better spent bridging the gap between spending and revenue in next year’s upcoming budget.

Change the funding structure of mass transit: Transportation, to the extent possible, should be funded by user fees. Gasoline taxes and vehicle fees represent an effort to do this for road funding. But mass transit funding comes from driver fees and fines, Turnpike toll money, and sales tax revenue. Transit systems should instead be funded through user fees, freeing driver charges to fund the roads they use and moving sales tax revenues back to the General Fund.

Moreover, if users of mass transit shouldered more of the costs of their transportation choices, transit agencies would improve to attract customers with quality service, rather than requiring higher taxpayer subsidies. Competitive contracting of mass transit operations should be used to reduce costs and improve service, saving taxpayers money.

End prevailing wage mandates: Enacted in 1961, Pennsylvania’s Prevailing Wage Act mandates contractors pay inflated wages on most state or local government-funded construction projects. Mandating the highest “prevailing” wages on qualifying government construction projects has increased costs by 10% to 30% more than what contractors would pay workers for identical projects funded with private dollars.

Allowing construction companies to compete for contracts based on market wages would provide services at lower costs to taxpayers. The commonwealth and local governments spent approximately $6.3 billion on construction projects subject to the Prevailing Wage Act in 2012, according to the Department of Labor and Industry. If the mandate were ended, taxpayers could save upwards of a billion dollars.

For more savings solutions, read our latest policy report, Blueprint for a Prosperous Pennsylvania.