Reversing the Status Quo in Pennsylvania
In his 2015 budget address, Gov. Tom Wolf said “It’s not good enough to just say no and continue with the same old same old.” More recently, taking to social media, the governor said “We cannot continue with the status quo in Pennsylvania.”
The reality is, higher government spending and raising taxes—while ignoring key fiscal reforms—is the status quo in Pennsylvania.
Higher taxes on working families
For 45 years, government spending has steadily risen, increasing by an inflation-adjusted $13,800 per family of four or $3,450 more per resident.
The steady rise in spending has pushed up the tax burden on Pennsylvania families to the 15th highest in the nation. As Philadelphia Daily News columnist John Baer has pointed out, every governor since the 1970s has increased the burden.
Wolf’s tax increase proposals—whether his initial proposal of $1,400 more per family of four, his second of $1,000 per family of four, or his third of $750 per family—would prolong the troubling trend.
Fewer jobs and slower economic growth for Pennsylvanians
As a result of the burden of government spending and taxation, Pennsylvania has lagged the rest of the nation in economic growth.
From 1970 to 2014, Pennsylvania ranked a dismal:
- 49th in job growth,
- 45th in personal income growth, and
- 48th in population growth.
Gov. Wolf’s tax proposals would accelerate the decline of Pennsylvania’s economy. In fact, Wolf’s original tax plan would have cost the state 40,000 private sector jobs.
A prohibition-era government-run liquor monopoly
Pennsylvania remains one of only two states with a complete government monopoly over wine and liquor sales. A majority of Pennsylvanians support letting private retailers and grocery stores sell wine and liquor, but Gov. Wolf vetoed such a plan to the delight of union executives.
Not only does the state store system deny consumers choice and convenience, its existence creates a conflict of interest in which government regulates and promotes alcohol purchases.
Moreover, the government liquor monopoly preserves a corrupt system in which bureaucrats have been indicted and convicted for taking bribes and accepting gifts (and trips to strip clubs) from vendors.
The culture of corruption at the PLCB shows precisely why Gov. Wolf was wrong to veto liquor privatization. When a few bureaucrats control what products Pennsylvania residents can buy, it's no surprise vendors offer lavish gifts to earn bureaucrats’ favor.
A broken pension system fueling the property tax crisis
In July 2015, Gov. Wolf vetoed a pension reform bill that would put new state and school employees into a plan with a defined contribution component (like a 401k). Despite some of Wolf’s rhetoric, credit rating agencies actually look favorable on moving employees to a defined-contribution plan.
Wolf has resisted any real reform to the state’s pension systems, the costs of which have led to higher property taxes and teacher layoffs.
In 2015, the pension plan for school teachers failed to meet investment return projections. School districts and state taxpayers will have to find even more cash to make good on retirement promises, putting the squeeze on the state and local budgets.
Political privileges at taxpayers’ expense
During the 2014 campaign, 12 government unions gave Wolf $3.4 million in direct campaign contributions and millions more in indirect support from union dues. Since taking office, Wolf has been negotiating—behind closed doors—contracts worth billions with many of those same unions.
Two reforms would create greater transparency and accountability in government unions’ political activities. The first would require the terms and costs of union contracts to be posted publicly before they go into effect. The second reform—paycheck protection—would end taxpayer collection of union political money.
But Wolf has refused to support these commonsense measures.
The governor is right when he says we can’t continue with the status quo. Unfortunately, he’s the one blocking the changes Pennsylvania needs: lower taxes on working families, pension reform, liquor privatization, paycheck protection, contract transparency, and more jobs so that all Pennsylvanians can flourish.