Allegheny Institute: PA Budget Debate: Where Does Government’s Obligation Lie?

Member Group : Allegheny Institute

Thomas Jefferson writing in the Declaration of Independence lays out the self-evident truths that form the basis of the nation’s founding. To wit; all men are created equal and endowed by their Creator with unalienable rights and that to secure these rights governments are instituted among men, deriving their just powers from the consent of the governed. Pennsylvania’s Constitution in Article I, Sections 1 and 2, affirms the principles so eloquently penned by Jefferson. These references will serve as a backdrop to the discussion that follows.

Once again we find ourselves locked in a bitter debate over how much money Pennsylvania will spend in total and on individual items during the next fiscal year. To be sure this annual struggle has become a rite of spring. However, with the state mired in a serious recession with falling tax revenues, this season’s debate is even more intense and the stakes much higher. Let us not forget that a main reason for the deficit difficulties the Commonwealth now faces has been the profligate and extravagant growth in budget outlays over the past several years.

A day of reckoning was inevitable, but that reality did not prevent the Governor from proposing and eventually getting large spending increases every year. Indeed, even as the state faces a near-$3 billion deficit in the fiscal year ending June 30, the Governor is proposing close to a $2 billion rise in outlays for the upcoming fiscal year.

Senate Republicans are attempting to bring some rationality back to the process by passing a spending bill that basically holds spending at the current fiscal year level. That plan calls for $24.6 billion in state funding—reflecting the reality of reduced tax revenues—and $2.7 billion in Federal stimulus money. In order to hold spending level and still allow increases in certain areas, it was necessary to make cuts in a number of categories, some reductions going all the way to zero funding for next year.

Predictably, groups who will get no increase or undergo cuts in the Senate plan are not pleased. Nor are the elected officials who have become patrons of these groups. The Governor is particularly incensed that his plan to increase education funds has been trimmed back to the current fiscal year level. State education officials are upset, claiming that school districts, some of which are suffering tax revenue losses, will have to raise tax rates to make up shortfalls. In response to which, Senator Corman is quoted as saying "School districts aren’t exempt during tough times. They have to make tough decisions." A truly remarkable and courageous utterance for an elected official to make in Pennsylvania.

Of course, the Senator is correct. In times of financial hardships when many are out of work altogether or on reduced hours, and when many who are working are taking pay cuts or losing health care and other benefits, the folks who work for government or government created entities such as school districts should not be completely protected from the recession’s effects at the expense of their fellow citizens who are already hurting.

Here’s an idea. If unionized school employees really care about the communities where they work, why don’t they volunteer to forego pay increases for the next school year? After all, since employee compensation makes up the bulk of school costs, accepting a pay freeze would provide substantial relief to next year’s budget problems for many school districts across Pennsylvania. With the prospect of huge tax increases to fund looming teacher pension shortfalls, it would be an enormously positive gesture.

Without some salary relief, school districts will have to find ways to cut spending or raise taxes. Every school board facing this quandary should at least ask union employees to help by agreeing to a pay freeze. However, given the posture exhibited by the unions in contract negotiations, it is unlikely that an agreement to freeze pay will be forthcoming. At that point, the residents and taxpayers will be able to see right into the core of the union mindset and all its hypocritical moralizing about how unions exist to help working people.

In some states teacher layoffs and pay freezes have already been introduced or will be implemented in the fall semester without having to plead with unions. And that brings us back to the Pennsylvania Constitution wherein protecting the rights of individuals is paramount. The government’s creation of public sector unions and bestowing so much power upon them relative to the taxpaying citizenry is a direct refutation of the government’s most sacred obligations and a betrayal of the Commonwealth’s early heritage.

The current budget battle offers a perfect opportunity for elected officials from the Governor on down to ask school employees to help their communities and state taxpayers. Who will be the first?

Then perhaps the Governor and General Assembly can engage in some serious discussion about holding the future growth of state spending to no more than inflation or state income growth, whichever is lower. This is a vital reform if Pennsylvania hopes to escape its languorous growth of recent decades.
Jake Haulk, Ph.D., President
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