Whiskey and Car Keys
Author P.J. O’Rourke once wrote: “Giving money and power to government is like giving whiskey and car keys to teenage boys.” He must have been thinking about Gov. Rendell and the Republican-led General Assembly.
When Gov. Ed Rendell assumed office in January 2003, the General Fund budget (which is only about half of what state government spends annually) cost the average family of four in Pennsylvania more than $6,731. With the recently passed $26.114 billion 2006-07 General Fund budget—a 7.6% increase in spending over last year’s budget—the cost of state government to that same family jumped to $8,400, a 26.2% increase in General Fund spending, or $1,673 more, in just four years.
The fiscal year ending June 30th set a “windfall profits” record for the Commonwealth of Pennsylvania with excess tax revenues reaching nearly $1 billion. In other words, Pennsylvanians were overcharged by state government the equivalent of $275 per family of four. But that money is not being returned in tax rebates or tax cuts—the Harrisburg spendthrifts have already spent it.
The total FY 2006-07 spending plan of $55 billion (which includes all state government spending for the fiscal year) will cost the average family of four more than $1,470 each month—the equivalent of a monthly mortgage payment on a $233,000 home. However, most Pennsylvania families are probably not very satisfied with the value provided by this level of state government spending. And they shouldn’t be.
Since January 2003, Gov. Rendell and the Republican-led General Assembly have dramatically increased government spending by more than twice the rate of inflation—26.2% vs. 10.3%. However, during this time period, job growth, income growth, and population growth in Pennsylvania have been anemic relative to the rest of the nation.
According to Dr. Jake Haulk of the Pittsburgh-based Allegheny Institute, the average job growth in the nation was 76% higher than Pennsylvania’s job growth between January 2003 and May 2006. Haulk further notes that private sector jobs in Pennsylvania number only 2,600 more than the Commonwealth’s pre-recessionary high water mark in February 2001, which “represents an embarrassingly small, miniscule rise of less than half of one percent in more than five years.” [emphasis added]
It is not because Gov. Rendell and the Republican-led General Assembly haven’t tried to tax, borrow, and spend our state to prosperity. Indeed they have, as Haulk writes, to the tune of $1.7 billion in taxpayer-funded “economic investments” since Gov. Rendell assumed office. Yet according to the latest data available from the U.S. Bureau of Labor Statistics, Pennsylvania ranked 38th in the nation in job growth between December 2002 and December 2005.
State government’s operating budget continues to consume larger amounts of personal income, increasing by more than 42% since 1970. Yet state personal income growth ranks 43rd in the nation since Gov. Rendell took office, according to the latest data from the U.S. Bureau of Economic Analysis. In population growth, Pennsylvania also ranked 43rd among the states, according to the latest data from the U.S. Bureau of the Census.
These indicators of poor economic performance are not news to Gov. Rendell and the Republican-led General Assembly. They understand that Pennsylvania’s economy has been careening toward an economic cliff for years. And with the passage of yet another record-breaking spending plan, one can only wonder when Pennsylvanians will lock up the liquor cabinet and take the car keys away from the Harrisburg politicians.
# # #
Matthew J. Brouillette is president and CEO of the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent public policy research and educational institute located in Harrisburg.