While Nobody was looking, Harrisburg quietly spent $26 billion
During the coronavirus shutdown, Pennsylvania’s government faced a crisis of leadership and transparency. Governor Wolf’s heavy- handed response caught workers, families, and small business owners off guard—and his rejection of any input and lack of transparency created a second crisis, an economic one.
Because of COVID-19 and Wolf’s actions, more than 2 million workers have filed for unemployment benefits, 60% of small businesses report being on the verge of failure, tax deadlines have been pushed back, and Pennsylvania’s unemployment rate reached its highest since the Great Depression.
State lawmakers have rightly focused efforts on getting Pennsylvania back on track. With such unpredictability surrounding the economy and government revenues, they postponed action on the full state budget. Instead, at the end of May, lawmakers passed and Wolf signed a partial “stopgap” budget.
While that action has kept the government functioning and given lawmakers more information regarding a spending plan, it also delayed necessary tough decisions—likely until after the next election, which conveniently protects lawmakers from accountability. This could mean tax increases are looming for working families and small businesses that are already suffering.
Pennsylvania must tighten its belt at some point to avoid massive tax increases. As it stands, we’ll already have to fight a battle over solvency in a few months—so the sooner lawmakers start working toward bipartisan solutions, the better.
For starters, our state has been shifting more and more tax revenue into various accounts in the “shadow budget” for years. Now would be an opportune time to curtail this practice—moving spending and surpluses back into the general fund, where lawmakers have more oversight and can prioritize the spending of all state dollars.
Likewise, lawmakers should move now to end the government-run liquor monopoly. The state-run liquor stores, a relic of Prohibition, utterly failed Pennsylvanians during this crisis, with an embarrassing series of debacles that turned residents into bootleggers and cost the state millions in lost revenue.
House Bill 2547, by Rep. Timothy O’Neal (R-Washington), would not only get government out of the booze business but would also generate much-needed additional revenue to the state during a budget shortfall. This is exactly what 70% of Pennsylvania voters demand, according to polling after the shutdown.
There are many bipartisan reforms the state needs to adopt over the coming months. The Taxpayer Protection Act would put state spending growth on a sustainable track, preventing spending excesses while allowing the state to build up its rainy-day fund. At present, our rainy-day fund has enough reserves to cover only 3.7 days of state government spending, barely making a dent in the budget shortfall.
Lastly, lawmakers must use this time to provide educational options for families. While state and federal funds have been doled out to businesses, hospitals, nursing homes, colleges, and school districts, this hasn’t helped the students who were short-changed when schools shut down for weeks on end.
Government institutions have gotten more than their fair share. Now it’s time to support parents who paid out-of-pocket for several months for their children’s education, on top of the tax money that funded shuttered schools.
“Back on Track” education scholarship accounts (ESAs) are a proposal to aid parents with a $2,000 stimulus check that sets their kids up for success, regardless of their school’s quarantine response. According to polling from just a few months ago, the concept of ESAs is supported by 73% of Pennsylvanians. Federal aid funds have now made this proposal a commonsense option.
Wolf campaigned on the slogan of jobs that pay, government that works, and schools that teach. As a result of his actions over the past few months, however, millions of Pennsylvanians have none of those. By enacting a stop-gap budget that deferred tough decisions, lawmakers have taken a risky course—but there will still be an opportunity after the election to help businesses provide jobs again, restore government accountability, and let kids learn.