Government Spending on Track to Bankrupt PA

Member Group : News Releases

Libertarian Party of Pennsylvania (LPPa)
3915 Union Deposit Road #223
Harrisburg, PA 17109

For Immediate Release: October 19, 2009

Contact: Doug Leard (Media Relations) at [email protected] or
Michael Robertson (Chair) at 1-800-R-RIGHTS / [email protected]

Harrisburg – Governor Rendell has signed legislation to enact a 2009-2010 budget of $27 billion for General Fund expenditures and $61.7 billion of total operating expenditures.

Over the last 10 years, Pennsylvania’s total operating expenditures have increased 65%. Though Governor Rendell called this "a responsible budget", state government will spend over $11,250 per Pennsylvania household. According to the U.S. Census Bureau, median household income in Pennsylvania was $48,562 in 2007 (latest available numbers). This means that Pennsylvania government is extracting and spending (on average) over 23% of every dollar each household earns.

Of course, this does not count the money extracted and spent by federal and local government. Nor does it include government’s debt and unfunded obligations which, according to the 2009 Fall Report from the General Accounting Office, exceed $480,000 per household .

Per LPPa Media Relations Chair, S. Douglas Leard, "Government is reaching deeper and deeper into our pockets, our children’s pockets and our grand-children’s pockets. This is a very dangerous trend."

Pennsylvania’s budget depends on tax increases including $1.5 billion from a retroactive increase in the Capital Stock & Franchise tax, which Governor Rendell said was the most harmful to Pennsylvania’s business climate. The budget also relies on $2.6 billion in federal fiscal relief and $2.1 billion in one-time revenue including draining Pennsylvania’s reserve fund by $375 million.

The budget does nothing to address looming fiscal crises in Medicaid and pension fund payments. According to the Hospital and Healthsystem Association of Pennsylvania (HAP), Medicaid already accounts for 30% of the state budget and "in the midst of the economic downturn, Pennsylvania Medicaid spending and enrollment… is expected to grow faster." Meanwhile, pension fund payments are expected to increase from $550 million this year to over $4 billion in 2012-13.

Continued Leard "Harrisburg bureaucrats, with help from Washington, are taxing and spending us to a point where we, and our children, will be slaves to the state. We must change direction. The Commonwealth Foundation has offered a series of reforms and spending cuts that move Pennsylvania in a new direction. Their reforms include eliminating corporate welfare, reforming Medicaid to give individuals more control over their health care spending, and repealing prevailing wage laws. Pennsylvanians must stand up and demand a new direction in our state government, a direction toward restoring fiscal control and limited government."

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