Big Decisions Ahead for PA

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Contact: Dan Massing
House Republican Public Relations
(717) 772-9845
October 5, 2010

Big Decisions Ahead for Pennsylvania

By Rep. Dave Reed* (R-Indiana)

John F. Kennedy once said, "There are risks and costs to action, but they are far less than the long-range costs to comfortable inaction." The state of Pennsylvania has fallen victim to far too many years of "comfortable inaction" by its leaders on the major issues confronting our citizens and our communities.

In January, a new governor and a new General Assembly will be sworn into office and will be immediately confronted with a host of very tough decisions that will impact what the future will hold for our state.

First and foremost, lawmakers will have to decide the best way to pull Pennsylvania out of its current economic slump and put our families back to work.

For the past decade, the state’s economic policies have far too often revolved around the "cardboard check" approach to economic development. Government picks the winners and losers and corporate welfare abounds.

Despite throwing billions of dollars into this approach, these policies have left the Commonwealth with an unemployment rate hovering close to 10 percent and record debt levels. Obviously, when one out of every 10 Pennsylvanians who want to work cannot find employment, it’s time for a new direction.

The good news is that there is a better approach. It calls for establishing a fair and competitive business tax climate in the Commonwealth – one that rewards innovation, promotes job creation, and puts our workers and their families first.

The current business tax code is a complicated and seemingly haphazard system. A select few companies hire expensive accountants to find tax loopholes, while the rest of our employers struggle to pay their taxes day after day.

If we want to grow our economy, our policies should be simple and straightforward. We must level the playing field for all job creators. No more bailouts, no more tax loopholes, and no more corporate welfare. Those dollars should be used to lower taxes and invest in our infrastructure for all job creators to benefit on an equal basis.

The second major issue facing our state will be the more than $4 billion deficit that results when federal stimulus funds dry up. Again, there are two approaches. The first is to determine how much government wants to spend and then raise taxes to match that amount. This approach subordinates the needs of taxpayers to the wants of government.

A better approach identifies how much state revenue is available and then brings expenses in line. This is the approach used by most families, which simply cannot afford to spend more than they earn. To paraphrase the great economist Adam Smith, what works so well for families can hardly be bad advice for the government.

The days of shadow budgets, only balanced using gimmicks, must end. That means Pennsylvania must become more fiscally responsible. As a state lawmaker, I believe in the importance of leading by example; reducing the size and cost of the state Legislature should be our starting point.

The state also must eliminate discretionary spending before cutting monies for the core functions of government. Economic and spending decisions should be based upon good policy, not bad politics. The recent decision to spend $10 million in taxpayer money on a library named after outgoing U.S. Senator Arlen Specter is just the latest in a long-running series of wasteful spending that must stop.

These are not the only two ways to save taxpayer dollars. The General Assembly also should approve the bipartisan welfare reforms outlined by Democrat Auditor General Jack Wagner and some Republicans in the state House. Several audits have identified hundreds of millions of dollars of waste, fraud and abuse in Pennsylvania’s welfare system. Welfare should be a tool to fight poverty, not just another entitlement. Pennsylvanians are generous people. However, we get rightfully upset when others cheat and steal from the system.

Finally, the state must address the looming public pension crises in the Commonwealth’s two publicly financed retirement systems. For retired and current teachers, state police officers and other pension system participants, a promise made must be a promise kept. However, we must reform the system for people who enter it in the future to bring it closer in line with retirement plans available in the private sector. We cannot allow the current system to bankrupt itself or our taxpayers.

The road to economic prosperity is not paved with more state spending and taxes. Instead, state government must become smaller, more agile and responsive to our citizen’s needs.

Our Commonwealth stands at a fork in the road. Down one path are more taxes, higher spending, increased waste and, ultimately, fewer jobs. Down the other path are lower taxes, less spending, reduced waste and more jobs. The decisions are big, the challenges are many, but given the courage, we have an opportunity to right the ship for generations to come.

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Republican state Rep. Dave Reed represents the 62nd House District in Indiana County. Currently serving his fourth term in the House, Reed is a member of the powerful House Appropriations Committee as well as the Environmental Resources and Energy, Consumer Affairs and Finance committees. He is a co-chair of the House Republican Policy Committee Energy Task Force. Reed, his wife, Heather, their son, Joshua, and their daughter, Gracie, live in White Township.