For Immediate Release
Contact: Cindy Hamill
Governor’s Budget Right on Priorities
February 4, 2014, HARRISBURG, Pa—In response to Governor Corbett’s budget address this afternoon, Matthew J. Brouillette, president and CEO of the Commonwealth Foundation, released the following statement:
The long-term fiscal challenges facing the state cast a shadow over this year’s budget address. Governor Corbett previously signed the first budget in the last 40 years that reduced state spending and has been able to balance the budget without further taxing Pennsylvania’s working families. Today’s budget address continues that trend by controlling spending levels and emphasizing needed cost-saving programs.
Yet, the structural deficit of years past, ignored when federal stimulus dollars patched the state budget, still lingers. State spending represents an all-time high. This includes education spending, despite a misinformation campaign pushed by union leaders claiming $1 billion in cuts.
The governor’s efforts to improve education outcomes should include increased educational options for parents and children. Strengthening and expanding already-existing charter schools and the Educational Improvement Tax Credit that serve so many under-served students at a lower cost to taxpayers should remain a priority of any education reform.
Governor Corbett was loud and clear in his call to address the public pension crisis. The fiscal reality is that the state and school districts are facing massive increases in taxpayer contributions because of the failure to reform the state’s defined-benefit pension systems. While Gov. Corbett’s budget proposal deals with short-term impacts, we should move new employees to a predictable and affordable defined-contribution pension system. Such reform, which has passed committees in both the House and the Senate, controls future costs and significantly curtails the political incentives to manipulate employees’ retirement benefits.
Further, allowing school districts to use their $3.8 billion in reserve funds to "prepay" their pension costs by investing in pension funds would help strengthen the pension system immediately.
Gov. Corbett and lawmakers have made serious efforts to combat fraud and abuse in welfare. Still, Public Welfare is now the single largest state program and consumes nearly 40 percent of the General Fund budget, with spending growing faster than revenues.
We recommend instituting recovery audits and enforcing eligibility requirements to save taxpayers an estimated $1 billion without reducing aid to those who truly need it.
We further recommend reducing economic development programs, and, instead, implementing tax cuts for all taxpayers to spur robust economic growth and job creation.
Transitioning government out of areas that can be handled more efficiently and effectively by the private sector should be a priority for those seeking to economize taxpayer dollars. We are pleased that liquor store privatization, which already passed the State House, remains a top priority in the governor’s address.
Finally, getting Pennsylvania’s fiscal house in order is made even more difficult when special interest groups like government unions use taxpayer-collected union dues and campaign contributions to fight pension reform, liquor reform, and education reform. Ending this exclusive legal and financial privilege of having the taxpayers collect their political money would force union leaders play by the same rules as everyone else and give average Pennsylvanians a fighting chance in these important policy debates.
We hope the governor and the General Assembly consider these and other budget recommendations contained in our just-released comprehensive budget report, Blueprint for a Prosperous Pennsylvania.
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For more information, please contact Cindy Hamill, director of strategic communications for the Commonwealth Foundation at (856) 607-4208 or [email protected].
The Commonwealth Foundation, founded in 1988, crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.