Santa Claus Budgeting

Note: This commentary originally appeared in the Philadelphia Inquirer.

With Christmas fast approaching, children are busy creating wish lists for Santa Claus. While most kids eventually outgrow a belief in Santa — and realize it’s their family buying their gifts — a few Pennsylvania politicians seem unwilling to give up the make-believe world of their childhood.

Just as Santa promises toys and totes bags of presents, some politicians promise gifts to voters and hand out goodies to countless special-interest groups. If you believe their spin — and in Santa — no one will have to pay for these gifts.

This Santa Claus approach to budgeting has played a huge role in the current impasse in Harrisburg.

The past two weeks have been a perfect example. The state Senate and House each passed competing budgets ($30.8 billion and $30.3 billion, respectively), yet neither offered a plan to pay for this spending.

In other words, Gov. Wolf and lawmakers know how they want to spend your money, but they don’t want you to see your new tax bill.

This is hardly a new approach. Remember Wolf’s plan to impose a severance tax to pay for new education spending? The promise was that just a few natural-gas corporations would pay the tax. In reality, all Pennsylvanians, not just drillers, would pay via fewer jobs and higher energy costs. According to the Independent Fiscal Office, families earning less than $100,000 a year would have faced $180 million more in utility bills under Wolf’s original severance tax.

Indeed, Santa-style budgeting started in March, when Wolf unveiled his original proposal that called for the largest spending increase in state history. Like Santa, he offered oodles of goodies, while pledging that the “average homeowner” would actually pay less after property tax rebates.

Wolf's promises didn't hold up to scrutiny. All told, his plan, which included increases in sales and income taxes, would have resulted in a net tax increase of $1,400 per family of four. In fact, every income group — from lowest to highest — would have paid more taxes, the Independent Fiscal Office reported.

The pattern repeated in four more tax hike proposals. Each time, Wolf gushed over all the new presents he would give. Conveniently, he avoided mentioning who would pay for it all. When the truth came out and families realized the tab was theirs, legislators rejected these plans.

The lesson? No one wants to pay more taxes — and for good reason.

The commonwealth’s state and local tax burden is already $4,374 per person, or a whopping $17,000 per family of four, according to the Tax Foundation. This is the 10th highest state and local tax burden in the nation.

What have over-taxation and over-spending given us? From 1991 to 2014, Pennsylvania has ranked at the bottom of the charts in key growth measures: 45th in job growth, 47th in personal income growth, and 48th in population growth.

In other words, Santa Claus budgeting has done nothing but fill Pennsylvania families’ stockings with lumps of coal.

What taxpayers really need for Christmas is protection from the cycle of ever-increasing spending and taxation.

The Taxpayer Protection Act (TPA), advanced by the state Senate earlier this year, would limit spending growth to inflation plus population growth. This is a great way to avoid a higher tax bill, and it’s a present we all can enjoy.

Making sure this budget-process breakdown never happens again would also make a nice stocking stuffer. Bills pending in the House and Senate would guarantee that schools and social services receive funding during an impasse — meaning students would not become hostages to budget panic.

If Pennsylvanians have learned anything over the past six months, it’s that no matter what politicians say, the promise of new and bigger presents just means someone is paying more. That someone is you.

This Christmas, let’s stop promising special interests they’ll get every present on their wish list. Instead, let’s get serious about controlling spending — and leaving more than coal in taxpayers’ stockings.


Nathan A. Benefield is vice president of policy analysis for the Commonwealth Foundation