Observers of the state budget process under Gov. Rendell and a divided General Assembly know that it is akin to a high-stakes chess match, replete with public relations offensives and counteroffensives.
The governor’s most salient tactic is to present the public and his opposition—Senate and House Republicans—two painful options from which to choose: the first option, which he prefers, is to raise taxes on working Pennsylvanians and job creators; the second, which no one favors, is painful spending cuts that would result in, among other things, the firing of 800 state troopers, kicking grandma out of her nursing home, and depriving Johnny of his education. Chess’s grandmasters call this type of dilemma a “zugzwang.”
The good news is that we can reject Rendell’s budget zugzwang. We are not limited to two equally undesirable choices because we can, in fact, provide for core government functions without raising taxes.
When Gov. Rendell took office in 2003, the General Fund Budget was $20 billion. This was more than enough money to pay for public safety, human services, and education. Yet, when the Senate produced a budget that would spend “only” $27 billion in 2009—an increase of over $2,000 per family of four in Pennsylvania—the Governor declared a state of emergency and embarked on a campaign to scare citizens into supporting massive tax increases on personal income, business assets, tobacco, health care, natural gas, and sales. The Governor’s three-year price tag would extract more than $8 billion in higher taxes.
The problem with the Governor’s rhetoric is that it doesn’t square with reality. Under the Senate budget proposal, public education and health and human services would receive more money than ever—despite a revenue shortfall of $3.26 billion. With $27 billion to spend in the General Fund alone, Pennsylvania can take care of our neediest citizens, educate our children, and pay our police officers. We don’t have to raise taxes on citizens who already shoulder the 11th highest state and local tax burden in the nation.
Consider public welfare—the single largest item in the state budget. In 2003, taxpayers paid $6.53 billion for health and human services to low-income families. Under the Senate budget proposal, those same programs would receive over $10.62 billion—an increase of more than 62% since 2003, and 5% more than they received in the last fiscal year. Yet, the Governor and special interest groups are calling these increases “cuts.” Using cunning rhetoric in radio ads across the state, they only cite “state funds” and conveniently exclude the billions in federal tax dollars coming into Pennsylvania for public welfare programs.
Of course, state and federal money comes from the same taxpayers—you and me. But by excluding federal tax dollars, Gov. Rendell intentionally fogs the debate by claiming the Senate budget “cuts” spending, when it does just the opposite.
Fortunately, there are members of the General Assembly fighting for another choice. They want to balance the budget, protect public safety and human services, and educate our children by requiring state government to live within its means rather than raising taxes in 2009.
But this budget battle is about more than just getting through 2009. It is about preparing for Pennsylvania’s future “After Rendell.” Raising taxes to fund the Governor’s spending plans will only make it more difficult for the next governor to address the significant problems ignored for the past seven years.
On the horizon, we will be confronted with significantly higher school, local, and state taxes to pay for billions in unfunded pension and retiree health care liabilities for state workers, teachers, legislators, and judges. We could see electricity rate hikes because of energy mandates and regulations from Harrisburg and Washington. We will be overwhelmed by the costs for failing to reform Medicaid and Medicare programs. And these are just a few of Pennsylvania’s coming fiscal crises.
Unfortunately, none of this matters to Gov. Rendell. He will be leaving messes for someone else to clean up. That is why the General Assembly must reject the Governor’s zugzwang of higher taxes or draconian cuts. They must say, “Yes, we can!” balance the budget, protect public safety and human services, and educate our children without raising taxes. And $27 billion is more than enough to do it.
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Matthew J. Brouillette is president of the Commonwealth Foundation for Public Policy Alternatives (www.CommonwealthFoundation.org).