CF: Five Ways to Cut $5 Billion

Member Group : Commonwealth Foundation

HARRISBURG, PA (1.11.11) —The Commonwealth Foundation released today its report 5 Ways to Cut $5 Billion, providing a fiscal roadmap of policy reforms for Gov.-elect Tom Corbett and members of the General Assembly to drive Pennsylvania out of an estimated $5 billion budget deficit without raising taxes.

"Pennsylvania lags the nation in economic growth despite leading the way in taxing and spending," said Commonwealth Foundation President and CEO Matthew J. Brouillette. "Pennsylvania families know full well they cannot spend what they don’t have-and they are demanding that budget decisions in Harrisburg reflect that reality. Fortunately for legislators, our report shows specific ways this can be done without compromising the core functions of state government."
The five principle recommendations to cut $5 billion (and more) include:

• Privatize government-owned and controlled liquor stores ($1.7 billion)
• End corporate welfare ($1 billion)
• End welfare fraud and abuse ($1 billion)
• Redefine "prevailing wage" laws ($1 billion)
• Eliminate government competition with free enterprise ($600 million)

The group also released Long-Term Care Reform:More Access to Better Care at Lower Costs, focusing on reducing runaway Medicaid costs that are projected to bankrupt the commonwealth in a few years. Pennsylvania could save additional billions of dollars through the following long-term care reforms, including:

• Incentivize private long-term care insurance to save the commonwealth hundreds of millions of dollars each year.

• Require greater asset spend down for eligibility for Medicaid long-term care benefits.

• Do more to recover funds from estates of long-term care beneficiaries.

• Encourage home equity conversion to help individuals pay for their own long-term care.

"The policies and problems left from the previous administration’s tax-borrow-and-spend agenda have saddled Pennsylvania with upward of a $5 billion budget gap," said Brouillette. "The governor-elect has stated he can fill it without raising taxes and we want to help him keep that promise."

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EDITOR’S NOTE: The full reports, 5 Ways to Cut $5 Billion and Long-Term Care Reform:More Access to Better Care at Lower Costs, are available at and by calling 717.671.1901.

The Commonwealth Foundation ( is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.