House Stands for Fiscal Sanity, Passes Responsible Spending Limits

For decades, state government has spent far beyond its means, leading to risky borrowing schemes and tax hikes on working families. But last night, the Pennsylvania House took a stand for fiscal sanity by passing HB 110, legislation known as the Taxpayer Protection Act (TPA), which limits spending increases to the combined rate of inflation and population growth.

This reform, which still allows for responsible spending growth, would have a dramatic impact. Had the TPA been in place since 2003, Pennsylvania taxpayers would have saved a cumulative $32.4 billion or more than $10,000 per family of four. And annual debates over closing gaping budget deficits would end in favor of billions in surpluses.

“It’s a breath of fresh air to see lawmakers pushing back against the status quo of out-of-control state spending,” commented Bob Dick, senior policy analyst for the Commonwealth Foundation. “Benchmarking government spending to economic growth is a critical part of restoring Pennsylvania’s fiscal health and sparing Pennsylvanians from annual calls for job-killing tax hikes.”

The chart below shows how much general fund spending has exceeded TPA limits since 2003.

House Bill 110, sponsored by Rep. Ryan Warner, would amend the state constitution with the TPA reform. Before becoming law, the legislation would need to be passed by the General Assembly in two consecutive legislative sessions and win approval from voters.

Once approved by voters, spending limits could only be superseded by a three-fourths vote of the General Assembly. The legislation also prevents lawmakers from circumventing the limit by explicitly prohibiting the transfer of tax dollars to funds outside the reach of the TPA.

The Senate Finance Committee advanced a version of the TPA constitutional amendment—SB 173, sponsored by Sen. Camera Bartolotta—out of committee earlier this year.

“We applaud the House for passing this potentially transformative legislation and urge the Senate to also pass the reform,” continued Dick. “Responsible spending limits will put Pennsylvania back on the path toward job growth and promote prosperity for all.

Commonwealth Foundation experts are available for comment. Please contact John Bouder at 717-671-1901 or [email protected] to schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.