Pennsylvania state government has a structural budget deficit of $1.2 billion dollars. This somewhat mystical figure is agreed upon by just about everyone. Given this rare point of agreement, why then is the ongoing budget impasse focused on spending increases rather than spending cuts?
When the working families of Penn’s Woods sit down to pay their monthly bills and income is less than expenses then the family cuts back on spending. That is because ordinary people can’t just walk into the boss’ office and say "I don’t have enough money to pay my bills so you will pay me more next month." And certainly, faced with a deficit, working families – and even most businesses – don’t go out and spend more.
But, that is exactly what Governor Wolf is proposing. He wants a $4.7 billion increase in state taxes. If you accept that there is a $1.2 billion structural deficit, then he also wants to increase spending by $3.5 billion. It is an unrealistic proposal and the reason why the state budget impasse has dragged on for five months.
The governor, however, has won on this front: Republican counter-proposals have focused not on spending cuts, but on increasing spending by less. Given everyone has bought into the structural deficit number the goal should be to reduce spending to bring actual income and expenditures into balance. That is what happens in the real world.
Government, however, does not live in the real world. At no point has a budget been put forward that would even slow the growth of state government let alone cut spending. The battle has been all about how much bigger state government will become, not about living within our means.
Driving this irrational approach to budgeting is spending on K-12 public education. The biggest lie since "if you like your health insurance you can keep your health insurance" is that Governor Tom Corbett took a meat axe to education spending. A cabal of Democratic politicians, labor unions and their media apologists perpetrated that lie during last year’s gubernatorial campaign even though actual spend numbers prove state tax dollars spent on public education increased to record levels under the former governor.
Governor Wolf has never shifted out of campaign mode, and in an effort to repay the unions who financially backed his campaign has made historic increases in education spending a key demand. Education is a motherhood and apple pie issue. After all, who doesn’t want our children to have the best education possible? We all do. The rub is little of the increases in spending actually benefit children, going instead to pay for bloated administrative bureaucracies and skyrocketing pension expenses.
To their credit, legislative Republicans are insisting on structural reforms to the state’s pension system before agreeing to any spending increase. But, they have accepted without as much as a whimper the governor’s premise that spending must go up. Wolf is already crowing that he has gotten Republicans to agree to a "historic" (meaning massively large) increase in state spending on education.
Yet even today, as the budget that should have been done before Independence Day fireworks remains unresolved as we shop for Thanksgiving dinner, not one single party to the budget debate has put on the table any serious menu of potential spending cuts. Even the GOP’s on-time, no tax hike budget which the governor vetoed included significant spending hikes. No effort was made to cut spending to match projected income.
There is an old saying in sports that you can’t win by simply playing defense. That is what has happened as the budget game goes into triple overtime. At no point has there been an offense designed to cut spending, just defense over spending increases. So the taxpayers of Pennsylvania have already lost the game, the only hope now is that the final score is not too lopsided.
(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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