Olympic Hurdles Grab for Gold in Pennsylvania Budget

This July signals the beginning and end of two feats requiring amazing determination, stamina and perseverance—the start of the 2012 Summer Olympics and the on-time passage of the Pennsylvania state budget.  While crossing the finish line is an admirable feat, viewers and voters are really cheering for athletes and legislators to do one thing: Bring home the gold.  

Worthy of a gold medal in legislative gymnastics, the General Assembly and Gov. Corbett teamed up to pass the single largest expansion of school choice in more than a decade. Thousands more children will be vaulting into schools of their choice through a doubling of the Educational Improvement Tax Credit—an immensely successful yet heretofore underfunded program with a 10-year history of serving students and saving taxpayer money.  The program now includes targeted scholarships to provide a balance beam of hope for kids currently trapped in violent and failing schools.

On corrections reform, the General Assembly won its semifinal round in archery by unanimously passing on-target legislation in corrections reform that makes communities safer and will save taxpayers millions in coming years.  Like any Olympic win, that was a tremendous achievement.

However, corrections reform is a two-part challenge requiring a final shot to win the gold, through a companion bill that reinvests a portion of the savings into effective corrections-related programs and to counties to reduce the state prison population.  Without passage of this bill in the fall, legislators will be firing arrows without arrowheads, thus coming up short of the target and the podium.

Next, like a volleyball duo, Gov. Corbett and statewide county commissioners embraced the spirit of teamwork to pass a county block grant pilot, giving 20 counties flexibility from state rules to fund welfare programs according to the unique needs of their residents.  Against a barrage of verbal volleys from critics, the block grant was only spiked to a third of the counties, still earning this critical welfare reform a bronze medal.

On business taxes, Gov. Corbett earns another silver medal for continuing to phase-out the Capital Stock and Franchise Tax, saving job creators hundreds of millions of dollars.  The complete elimination of this job-destroying tax, or reducing the second highest state corporate income tax rate in the nation, would have earned a gold medal.

When it came to streamlining the process for creating and funding charter schools, a priority for the governor, legislators fumbled the baton handoff between chambers, thus delaying the issue until fall. While some 90,000 students in Pennsylvania attend charter schools, the waiting list is 30,000 strong.  By not crossing the finish line and failing to allow the creation of more charters, fewer families will have a chance to provide an education best-suited to how their children learn and function.

To get to the podium on job creation, Gov. Corbett should phase out corporate welfare endeavors that give special favors to politically popular projects.  Creating across-the-board tax rate reductions is the best way to spur economic growth and put Pennsylvania on the path to a perfect 10 rather than selective credits and subsidies.

When it comes to the sprint that ended June 30, this budget took home a lot of hardware.  It does rein in spending, exercising the kind of discipline every athlete needs—something we haven’t seen in Pennsylvania for years, if not decades.  For that, Gov. Corbett and the General Assembly deserve significant credit.

Having said that, what’s gotten too little attention in Harrisburg—including in the new budget—is the marathon that’s coming.  Pension costs are skyrocketing.  Future costs for welfare and debt continue to grow as well.  Meanwhile, those responsible for lighting and feeding these fiscal fires, namely government union bosses, continue to have special political privileges and unparalleled power.

Keeping these issues status quo is like lawmakers bowing out of a boxing match because their foes are in an unreachable weight class.  If legislators wish to score a knockout on these issues, they need to hit the political gym this summer, bulk up on bipartisanship and come out swinging with statesmanship in the fall.

Let there be no doubt, this year’s state budget was a winner.  But there is a lot of race left to run and events to perform.  Until lawmakers and Gov. Corbett address future cost drivers like pensions and the special interests fanning the flames, state budgets will continue to take an Olympic effort to avoid tax increases, hold down spending and spur a better economy for all Pennsylvanians. 

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Nathan A. Benefield is Director of Policy Analysis with the Commonwealth Foundation (www.CommonwealthFoundation.org), Pennsylvania’s free-market think tank.