Adventures in state budgeting
In Lewis Carroll's classic Wonderland tale, Alice famously asks the Cheshire Cat, “Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” the feline answers.
The response could equally apply to those asking what's next for Pennsylvania.
Fortunately, the state House is more decisive than Alice. Lawmakers opted for the path of fiscal responsibility by passing a budget that confronts state government's spending habit head-on while rejecting tax hikes. Gov. Tom Wolf's proposed budget also recognized the need to streamline government but still included large spending increases and $1 billion in higher taxes, averaging $315 per family of four.
While the gap between the two visions is wide, the sides are dramatically closer than in prior years, signaling an on-time budget is possible.
As the budget heads to the Senate, where should lawmakers go from here? That depends on where they want Pennsylvania to “get to.” To put our state on a trajectory of economic growth and opportunity for all, they should ensure the budget holds to the following principles:
No tax hikes
Were the House budget to become law, Pennsylvanians could breathe a sigh of relief that their state tax bills would not increase. Given state residents already bear the 15th-highest state and local tax burden in the nation, “no tax hikes” are three words Pennsylvanians want to hear.
In a welcome departure from recent budgets, the House budget keeps spending growth below the rate of inflation plus population changes, as outlined in the Taxpayer Protection Act. For the past 47 years, state spending has tracked consistently upward at an unsustainable pace, increasing by an inflation-adjusted 189 percent, or $4,103 per person.
Corporate welfare cuts
Pennsylvanians deserve a budget that works for all, not just the politically connected. Our state leads the nation in corporate welfare spending, yet has little to show for it. While the House budget does not leave wasteful business subsidies entirely by the wayside, it reduces them by more than $56 million, with even more cuts possible.
A re-imagined government
The House budget starts down this road by expanding on last year's progress toward ending government's liquor monopoly and beginning to tackle critical human services and corrections reforms. In addition, both the House and Senate are taking steps toward structural pension reform that will increase options for public workers while respecting taxpayer dollars. Making this reform a reality is critical to our state's future.
During her adventures in Wonderland, Alice didn't much care where she ended up, so the Cheshire Cat said it didn't matter which way she went.
Unlike Alice, Pennsylvanians care about what lies ahead. They want a state where their families and communities are set up for success.
By controlling spending, rejecting tax hikes and pursuing structural forms, lawmakers can pave the way for opportunity and economic growth and define the next chapter in Pennsylvania's story.
Bob Dick is a senior policy analyst with the Commonwealth Foundation (CommonwealthFoundation.org).