February 3, 2020, Harrisburg, Pa. — Today, on the eve of Gov. Wolf’s sixth state budget address, the Pennsylvania House of Representatives passed a much-needed fiscal reform called the Taxpayer Protection Act (TPA), sponsored by Rep. Ryan Warner. The TPA places prudent limits on state spending growth, ensuring that state government lives within taxpayers’ means.
“We applaud House lawmakers for drawing a line in the sand to protect Pennsylvania families from Gov. Wolf’s overspending,” commented Commonwealth Foundation Vice President Nathan Benefield. “The Taxpayer Protection Act, which boasts 68 percent support across party lines, is the best way to make our commonwealth more attractive to families and job creators.”
State spending has more than tripled in the last 50 years, greatly outpacing economic growth, income growth, and the ability of residents to foot the bill.
The TPA now goes to the Senate at a time when new Census Bureau data shows people are fleeing high-tax, high-spending states for those that prioritize jobs and economic growth. Pennsylvania lost a net of 19,588 residents to other states in 2019—that’s a “brain drain” of 54 people every day. IRS data shows the outflow of people from Pennsylvania has caused a net loss of $1.4 billion in individual income.
(Infographic: Tax Revenue Migration)
The TPA is an amendment to the state constitution that restricts the rate of General Fund spending growth to the rate of inflation plus population growth. It does not mandate any cuts to the budget.
In addition to reining in spending, the TPA would enable lawmakers to prepare for economic downturns. Due to excessive spending, the state’s Rainy-Day Fund could run state government for a miniscule 2.6 days. Without reserve funding, revenue gaps have been closed by tax hikes, which have been attempted 11 times over the last five years, and risky borrowing schemes.
“People are moving to states like Idaho, Utah, Texas and Florida where state bureaucracies are forced to spend their money wisely, leading to lower taxes, more jobs and better economic conditions,” said Benefield. “A responsible government needs to control today’s spending both out of respect for the people and to prepare for tomorrow’s crises. The House has taken the first step in making that happen and the Senate should proudly take the next one.”
Commonwealth Foundation experts are available for comment. Please contact Michael Torres at 850-619-2737 or [email protected] to schedule an interview.
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