An Honest Debate About State Spending

In a press conference in late September, Gov. Rendell urged immediate passage of a state budget, decrying the lack of state funds to non-profit and social service organizations, noting several might soon have to close their doors. But when asked, Gov. Rendell said he would refuse to support a “stop-gap” measure to get funds to these organizations immediately.

What’s wrong with a stop-gap measure?  Sure, it could delay the “final” budget-but no one is harmed by that.  Gov. Rendell’s reasons are simply that he needs these social service agencies as leverage to push for higher taxes.  Indeed the only reasons these organizations don’t have funding now is because Gov. Rendell “blue-lined” them-vetoing their funding from the $27.3 billion budget passed by both chambers in September-despite the fact that Republicans and Democrats agree on how much these programs should get.

Throughout the budget process, Rendell has used this same tactic, called a “Washington Monument” ploy.  From claiming education would be set back decades, to asserting state police would have to be laid off (allowing child predators like Roman Polanski to roam free), to drumming up fears of social service agencies closing, Rendell has used the most politically popular programs in the state budget in an attempt to garner support for tax hikes.

However, a look at how the state is actually using taxpayer money reveals a much different scenario:

  • The budget deal reportedly includes another $5 million to bankroll the Pittsburgh Penguins new arena, on top of the $40 million already granted, to cover a shortfall in private financing.
  • The Treasurer’s office awarded a $928,000 consulting contract for marketing of the (near-bankrupt) prepaid college tuition program.
  • Rendell has promised $15 million in corporate welfare to keep Harley Davidson from moving its York County plant. This despite the fact that Harley received several state grants just a few years ago.
  • While a hiring freeze is still in place, Gov. Rendell promised a job in his administration to Harrisburg Mayor Steve Reed, who lost his primary election this year.
  • Recent audits by the Auditor General found hundreds of millions of dollars in waste and fraud in Public Welfare, including outright theft from the programs. The Rendell Administration denies any possibility of reducing fraud.
  • Despite their inability to pass a budget, lawmakers received $532,000 in tax-free per diems during July and August, some receiving over $5,000 (on top of their salary, mileage, and other benefits). These are ostensibly for food and housing, but no receipts are needed.
  • Lt. Governor Joe Scarnati pushed a special election for a vacant senate seat – estimated to cost taxpayers between $250,000 and $400,000 – slightly more than one month before a regularly scheduled election.
  • Lawmakers have celebrated, and taken credit for, grants for big screen TVs and Nintendo Wiis to senior centers.
  • While trying to justify tax hikes on all businesses, the Rendell Administration defends tax breaks for Big Hollywood.
  • House Democrats passed a new sales tax exemption for helicopters. Advocates claim these tax loopholes ‘create jobs,’ as though only these industries respond to higher taxes.
  • The state gave $6 million to help police the G-20 conference.
  • The budget ‘deal’ reportedly has $100 million in WAMs; these funds controlled by lawmakers have been used in recent years to:

Of course, there are many more examples of how taxpayer money is actually spent, but it is difficult for citizens to obtain this info, given a lack of spending transparency.   But amazingly (or not, for cynics), the Pennsylvania House has refused to move legislation that would put state spending in a searchable database online, despite three versions (SB 105, HB 1460, HB 1880) of this proposal having been put forward with bi-partisan support. 

Certainly, there are those who think that state taxpayers should fund WAMs, buy Nintendo Wiis for seniors, contract with top ad men, give grants to ACORN, fund sports stadiums and movies, and deny any wasteful spending-and believe these examples all merit higher taxes to pay for them.  But an honest budget discussion requires debating funding for these and other items-not the false pretenses put forward by Gov. Rendell and others only interested in spending more taxpayer money.

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Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation, an independent, nonprofit public policy research and educational institute based in Harrisburg.