For Pennsylvania Taxpayers, It’s Not Easy Being “Green”

When it comes to being “green,” Kermit the Frog has nothing on Gov. Ed Rendell and the Pennsylvania House Republicans. The two sides are promoting dueling environmental plans, both of which would spread lots of new taxpayer-underwritten “green” around the state if voters approve.

The initiatives share similar goals. Both the governor’s “Growing Greener II” and the House Republicans’ “Green PA” would increase funding to preserve farmland, clean up hazardous sites, and reclaim mines and streams by raising hundreds of millions of dollars from bond issues financed by new or existing taxes and/or fees. Both operate from the premise that government, not private individuals, should have the greatest say in directing development in Pennsylvania. And finally, both ignore policy options that could provide the same environmental improvements without further burdening Pennsylvania’s taxpayers.

The rationale for “Growing Greener II” is as follows: Since Pennsylvania’s economy has changed and major job losses have taken place, the commonwealth must increase its “investment” in environmental initiatives. However, little evidence is offered to support the notion that environmental degradation has caused Pennsylvania’s economic hardships. A far more likely explanation is state and local government spending that has, over the past several decades, consistently exceeded the combined rates of inflation and population growth and caused job providers to leave for states with more hospitable business climates.

Nevertheless, Gov. Rendell claims that “Growing Greener II” will be paid for through new and increased waste and pollution fees on “companies.” This sounds relatively costless to Pennsylvania taxpayers—until one considers that companies don’t really pay the costs of increased taxes and fees. They simply pass them on to their customers in the form of higher prices for products and services, and to their employees through decreased wages and benefits. And these new costs would simply add to the back-breaking burden Pennsylvania’s state and local governments already impose—approximately $8,213 per resident this fiscal year.

Finally, the governor’s plan extends his policy of trying to borrow and spend Pennsylvania to prosperity by providing $80 million in subsidies to providers of “alternative energy” sources and $170 million for community restoration and taxpayer-subsidized housing. Of course, the risks and possible rewards of such projects should be borne by private investors, not taxpayers.

The House Republicans have touted their “Green PA” proposal as the fiscally responsible alternative to the governor’s plan, saying that it does not rely on new or increased taxes or fees. While this statement is technically correct, it paints an incomplete and misleading picture of how “Green PA” would be paid for. “Green PA” calls for removing the sunset provision from the current waste disposal (or “tipping”) fee. This constitutes a tax increase for years following the original sunset date, as affected entities would then continue to pay a tax that they had every reason to expect to expire.

“Green PA” supporters also say that “local families” will be the ones designing the environmental efforts funded by the bond issue. Nevertheless, the “Green PA” legislation does call for state agencies to have a significant role in how those funds would be used. Specifically, it calls for project applications to be evaluated by the state, and for priority consideration to be given to “applications which maximize the ratio of environmental benefit to dollars spent.” This raises two obvious questions, neither of which is addressed by “Green PA”: What is the definition of “environmental benefit,” and who determines that definition?

But notwithstanding their unique flaws, both “Growing Greener II” and “Green PA” ignore policy options that could realize their common goals without expanding the size and scope of government. For example, a much better way to lessen the “development pressure” that many farm families feel is to eliminate the state’s inheritance tax, which compels so many farmers to sell their land, rather than pass it on to future generations. Another lasting way to relieve that “pressure” is to fix the crime, tax, and educational problems that make many Pennsylvania cities inhospitable to families with children.

And at the same time, private and non-profit land conservation groups—not state or local government—should take the lead in preserving farmland. While many Pennsylvanians do support government’s efforts to buy farmland, there is no reason why those tax dollars could not instead remain with individuals, who could then donate the same amount to private or non-profit initiatives that accomplish the same purpose. Giving one’s own money voluntarily is the best measure of one’s interest in preserving farms. Finally, if efforts to remediate environmental damage truly need expansion, existing funds could be re-directed from the state’s ineffective business subsidy programs.

Both “Growing Greener II” and “Green PA” suffer from the same false conceit—that a “greener” environment requires more “green” from the state’s already overburdened taxpayers. It’s time to eschew the same tired prescription of bigger government, and begin work on solutions that won’t put Pennsylvania’s families and businesses in the red.

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Grant R. Gulibon is senior policy analyst at the Commonwealth Foundation, a non-partisan, non-profit public policy research and educational institute in Harrisburg, PA.