Can PA Cut Spending and Still Provide Essential Programs & Services?

Member Group : Commonwealth Foundation

Those who feed at the trough of taxpayer funding typically argue that the state budget can’t possibly be reduced—or even see its growth limited to inflation and population growth—without jeopardizing key services. These critics typically incite fear that the state might have to shut down public schools, cut low-income households off medical assistance, let violent criminals out of prison, or cut funding for roads and bridges already on the verge of collapse.

Yet in a recent report, Government on a Diet, Spending Tips 2009, the Commonwealth Foundation identified $4.94 billion in wasteful spending, including $1.41 billion in the General Fund budget. The Commonwealth Foundation found three categories of state programs outside the proper role and functions of government.

• Corporate Welfare—programs which force all taxpayers to surrender more money which is redistributed to select, politically connected entities in the form of a government grant or tax break. Eliminating corporate welfare would save Pennsylvanians $1.7 billion in higher taxes and debt this year alone.

• Yellow-Pages Government—government-provided goods and services that compete directly with private enterprises and could be found in the Yellow Pages of the phone book. Privatization of yellow-pages government would return $2.5 billion in taxes and government revenue to the private sector.

• Self-Service Government—state programs and expenses actually work to the detriment of citizens, for the benefit of government officials, or reward the misuse of taxpayer dollars. Controlling self-serving government would save taxpayers $700 million annually.

Indeed, this $5 billion in wasteful state spending could be eliminated without touching basic education funding, road and highway funds, medical assistance, or state corrections. But that is not to say taxpayers aren’t spending too much on those programs already.

Market-based reforms in the delivery of public education, higher education, Medicaid, corrections and prison administration, and transportation would provide untold savings to taxpayers—and deliver better services to Pennsylvania residents.

Harrisburg policymakers need to reprioritize spending and cut waste from state government to avoid a tax increase on working Pennsylvanians and job creators. In short, they need to put Pennsylvania government on a diet and back on a path to fiscal and economic health.

For more facts visit

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Spending Tip: Reform Pennsylvania’s Medicaid Program
Medicaid (known as Medical Assistance within the Pennsylvania state budget) is growing at an unsustainable rate. By 2075, Medicaid will consume 94% of the Pennsylvania budget. An examination of Medicaid cases by the Auditor General finds that 14% of Medicaid spending went to cases involving error or fraud—costing taxpayer hundreds of millions of dollars.
Equally as problematic is that Medicaid delivers low-quality care. Indeed, Medicaid and other recipients of government health insurance often receive lower quality care than do the uninsured. Medicaid and other government health coverage programs also pay doctors and hospitals less, leading many to refuse to serve Medicaid patients, and forcing others to shift their costs by charging more to those with private insurance.
By adopting market-based reforms, the state government can not only reduce Medicaid spending, but provide higher quality service. Unlike the government-controlled system, those eligible for Medicaid should instead receive risk- and income-adjusted credits to purchase insurance from competing private health care plans. This would turn Medicaid into a real market where providers will compete for consumers and, more importantly, improve the quality of health care.
For more Spending Tips, read the full report, Government on a Diet: Spending Tips 2009, or visit

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Please, No More Taxes! Video Contest

Enter a video contest that offers a fun and rewarding way to raise awareness of Pennsylvania’s punishing tax burden. The first-prize video will earn $2,500, while second and third-prize winners will receive $1,000 and $500, respectively. The deadline to enter is June 1st, and winners will be announced on June 15th. Get the contest and rules at

Recent video submissions are available at Please rate and share these videos (ratings will be considered in awarding prizes) .

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