In recent weeks Americans have seen the dark underbelly of big government: the IRS targeting conservative groups; the Department of Justice tapping the phone lines of journalists; stonewalling by the White House on Benghazi. It is not the best of times to be pushing a big government agenda. But here in Pennsylvania that is exactly what state Senate Minority Leader Jay Costa is doing.
Speaking before the Pennsylvania Press Club, Costa boldly proclaimed his caucus’ highest priories over the coming months are raising taxes and expanding government programs. In essence he wants to double down on the failed policies that have gotten us into serious fiscal difficulty on a number of fronts.
Parroting national left-wing orthodoxy the Democratic leader of the state senate railed against Governor Tom Corbett for rejection of the Medicare health care exchanges being set up as part of the Affordable Health Care Act, commonly referred to as Obamacare. Pennsylvania would initially benefit from an infusion of federal cash, but according to the Heritage Foundation within five to six years massive state tax dollars would be required to sustain the program, quickly erasing the initial benefits. But that is part of the plan: ensnare the state in a massive new entitlement program; hook people on the benefits; run up a substantial deficit thereby creating a political climate that forces the enactment of new taxes.
Already Obamacare is showing signs of unraveling. So much so that veteran Democratic U.S. Senator Max Baucus of Montana several weeks ago termed the program a "train wreck." And, with the current IRS scandal in full bloom, public confidence in that agency’s ability to fairly and efficiently monitor and enforce the program are; well, non-existent.
Costa also pressed hard for lifting the cap on the state’s oil franchise tax as a way of raising more revenue to fix roads and bridges. This would add over 20-cents per gallon to the cost of gasoline. There is bi-partisan agreement that the state’s aging network of roads and bridges need serious attention. But Costa also proposes diverting even more state dollars into public transportation – particular the Southeastern Pennsylvania Transit Agency (SEPTA) and Port Authority Transit (PAT) in Pittsburgh. Both are legendary patronage havens sporting some of the highest labor rates in the nation.
Costa framed both the health care exchanges and spending on highway infrastructure as jobs programs. Yes, they would create jobs. But they would be jobs created by the transfer of private wealth to the government sector, not jobs created as a result of a growing economy. Some might say "jobs are jobs," but the siphoning of money on the scale proposed by Costa from the private sector will result in further stifling a slow economic recovery. That will hinder the process of creating private sector jobs. In the end the real cost may be in net jobs lost.
At the same time as he trumpeted big government programs, Costa detailed senate Democrats’ opposition to reforms that would unleash the power of free markets to create real economic growth. Specifically, they are opposed to privatization of the state’s Soviet-era state store system. Credible polls show Pennsylvanians widely support the improved convenience and selection of wine and spirits should Penn’s Woods adopt a system currently employed by 48 other states. It would create an opportunity for thousands of small businesses, and add real jobs in the private sector.
Costa also called for a moratorium on the phase out of the Capitol Stock & Franchise Tax. This is an arcane tax, one with which most Pennsylvanians are unfamiliar. It is levied on corporations in addition to Corporate Net Income taxes. Pennsylvania is the only state in the nation with both taxes. As a result, it contributes significantly to a poor overall state business climate giving other states a built-in advantage in competition for business creation and expansion.
Taken as a whole, the senate Democrat agenda is geared more to winning next year’s elections than in seriously addressing the problems and needs of Pennsylvanians. Costa employed populist rhetoric against Governor Corbett saying he is putting the needs of corporations over health care for people. But the opposite is true. The governor opposes putting state taxpayers on the hook for funding an already failing federal health care monstrosity, and pushes elimination of the Capitol Stock & Franchise tax as a way to spur real, private sector job creation.
So far polls indicate the Democrats’ political gambit is working. But that is little solace to Pennsylvanians who, if the Costa agenda is enacted, won’t be able to find work, will be saddled with a massive new state health care bureaucracy, will be paying more at the pump, along with higher taxes and smaller paychecks to fund a massive expansion of state government.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is [email protected].)
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