State Spending is Growing Faster than Taxpayers’ Ability to Pay
- Despite dramatic growth in state government spending, Pennsylvania ranks among the worst states in the nation in key economic performance indicators.
- From 1991 to 2011, Pennsylvania ranked 41st in job growth, 46th in population growth, and 48th in personal income growth.
- State government spending has consistently outpaced the growth of personal income. In fact, per family of four, total state spending (adjusted for inflation) grew by more than $12,000 since 1970.
- Prior to 2011-12, Pennsylvania’s total operating budget increased for more than 40 consecutive years.
- Legislators spent every dollar available during economic growth, then raised taxes during recessions.
The Taxpayer Protection Act (TPA) Would…
- Reasonably limit future growth in state government spending to inflation plus population growth.
- Require the government to prioritize spending.
- Create a Rainy Day Fund to be used to balance the budget in times of recession.
- Provide tax relief for working families by returning surplus revenues to taxpayers.
- Stimulate private sector job growth and make a more prosperous Pennsylvania.
Why a TPA?
The TPA Encourages Fiscally Responsible Budgeting and Spending
- A spending limit merely slows the growth in spending, it does not mandate any cuts.
- If the TPA had been applied from 2003 to 11, a cumulative $31.5 billion would have remained in the hands of taxpayers-almost $10,000 per family of four.
- Under the TPA index, state spending in FY 2012-13 could increase by 2.29 percent-or $963 million.
- Government spending should be limited to core programs and services. Increases should be tied to the increase in the prices (inflation) and the number of people served (population growth).
- The TPA is not a hard cap, but could be exceeded: 1) in cases of emergency, 2) with voter approval or 3) a supermajority of legislators.
- The TPA will ensure policymakers prioritize spending, and do so with regard to taxpayers’ ability to pay.