News Release: Three Steps to Close State's Budget Shortfall Without Tax Hikes

With a $1.4 billion projected budget shortfall for 2016-17 and just days to solve it, Pennsylvanians want solutions that won’t take even more money from their pockets.

Fortunately, lawmakers and Gov. Wolf have options—beyond risky loans or targeted tax hikes—that would fully close the budget gap without demanding one penny more from hardworking Pennsylvanians.

Three Steps to a Sustainable State Budget

Eliminate Corporate Welfare – Pennsylvania leads the nation in subsidies and handouts to politically favored businesses, at a cost to taxpayers of more than $800 million per year. These handouts fund things like horse race prizes and giveaways to multi-billion-dollar corporations. Ending corporate welfare would immediately close more than half the projected budget shortfall.
Privatize Liquor – Lawmakers could deliver $1.1 to $1.6 billion in up-front revenue letting grocery stores and small businesses sell wine and liquor. Ending government’s grip on booze should be a no-brainer.
Tackle the Shadow Budget – For too long, lawmakers have repeatedly moved spending “off book,” meaning it doesn’t appear in the General Fund budget. While last year’s General Fund budget was $31.6 billion, this was less than half of state government’s total $80 billion cost. Nearly $50 million was off book, essentially in a “shadow budget.”
Included in the shadow budget are more than 40 questionable programs costing nearly $2 billion. This includes more than $1.4 billion in trust funds subsidizing mass transit and $93 million in the Keystone Recreation, Park and Conservation Fund, used for swimming pools and golf courses. These funds should be redirected to more pressing priorities before Pennsylvanians are forced to pay more in taxes.

“With the June 30 budget deadline looming, lawmakers have a choice: Cut hardworking families’ budgets by forcing them to send even more money to Harrisburg or implement sustainable spending that puts taxpayers first,” commented Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation.

“Those who claim government is already ‘cut to the bone’ while doling out millions to horse-race prizewinners and multi-billion-dollar corporations like Amazon and Netflix have their priorities upside down. Before asking for one more dollar from Pennsylvanians, government needs to spend smarter. The solutions are clear; now, it’s time to make them reality.”

Elizabeth Stelle and other Commonwealth Foundation experts are available for comment. Please contact John Bouder at 570-490-1042 or [email protected] to schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.