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Trib editorial: Address Pa.'s spending problem

| Sunday, Feb. 25, 2018, 9:00 p.m.

As Pennsylvania lawmakers begin the process of cobbling together another state budget, a look back on their last fiscal blueprint exposes pitfalls that must be avoided.

Simply stated, Pennsylvania has a spending problem, evidenced in the agreement by Gov. Tom Wolf and lawmakers to tap a portion of the state's Tobacco Settlement Fund to cover a $1.5 billion bond issue. So long as that tobacco-settlement money flows, there should be no problem.

But to enhance those bond sales — given Pennsylvania's low credit rating compared with other states — the commonwealth sweetened the pot by agreeing to commit future sales-tax and hotel-tax revenues, if necessary, to pay off the bonds, according to a Philadelphia Inquirer report. A future decline in U.S. cigarette sales could conceivably lead to a drop in tobacco-company payments, according to some analysts.

As it is, those bonds are projected to require $15 million a year more in finance costs, as compared with bonds issued by triple-A-rated states, according to The Inquirer.

Meaningful efforts to rein in state spending through the Taxpayer Protection Act —which would limit increased spending to the combined rate of inflation and population growth over a three-year period — have gone nowhere. And while human-service expenses continue to escalate, the state resists a work requirement for healthy adults receiving Medicaid and food stamps, the Commonwealth Foundation reports.

Pennsylvania's fiscal savants shouldn't keep digging the same hole without first building a ladder to climb out of it.

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