Proposed Legislative Budget Office is Fiscal Folly

Member Group : Lincoln Institute

The compromise that resulted in the state budget agreement last summer included promised action on two major issues by October: enactment of a severance tax on gas in the Marcellus Shale Reserve, and creation of an independent legislative fiscal office. Amazingly, Republicans – particularly in the state senate – appear poised to both approve a job-crushing tax and to create yet another needless state bureaucracy.

The deal gives off the appearance that the GOP sold-out on the severance tax in exchange for getting a legislative fiscal office. It may or may not have been a quid pro quo, but in politics appearances are what matters. This appears to be a cave-in on piling additional taxes on the one industry in Pennsylvania that is actually growing so the legislature can expand its bureaucratic empire. Both actions are antithetical to the Republican Party’s supposed free market, less government philosophy and serves to further alienate voters who are already distrustful of both political parties.

Lawmakers pushing for establishment of a legislative fiscal office claim that it is needed because the Budget Office, which is under the governor’s control, has failed to accurately project state revenues over the past few years. The recession, of course, had a lot to do with the faulty revenue forecasts. But, Senate Republicans in particular were eager to accept the numbers last year in order to bring an end to the state’s budget stalemate. Thus their claims of concern over inaccuracy ring hollow.

What is actually at play here is legislative ego. Since the governor has a fiscal office, so too must the General Assembly have such an office. And, to satisfy their egos, leaders of both political parties are willing to spend millions of our tax dollars. At a time when the state faces a budget deficit that could approach $5 billion, legislators are willing to spend more on indulging themselves. The proposed legislative fiscal office is projected to cost $4 million in start-up money, and then take a minimum annual appropriation of $3.6 million. You can bet the mortgage that the final costs will be significantly higher.

All of this will merely duplicate tasks that are already performed by multiple state agencies. First of all, there are already two legislative committees dealing with fiscal matters. Both the senate and the house have appropriations committees. Each committee is flush with staff, all paid for by our tax dollars. Then of course there is the state Budget Office in the executive branch. Add in the independently elected state fiscal offices: state treasurer and auditor general, and you have literally thousands of state employees paid millions to monitor the financial affairs of the commonwealth.

The real issue here is not one of getting accurate budget numbers, or even streamlining the legislative budget-making process. It is a matter of the legislature wanting to be on an "equal" footing with the governor. This is why the four legislative caucuses have escrowed hundreds of millions of dollars into operating reserve accounts rather than release the money to pay for essential state services. The legislature is empire building. And you can bet that if, and likely when, the legislative fiscal office is created it will quickly grow in size and scope.

Further, the creation of a legislative fiscal office will do nothing to address the core cause of Pennsylvania’s fiscal woes. The core problem is that the legislature, prodded on by Governor Ed Rendell has spent well beyond our means. Senate Republicans caved into the spending last year, and this year leaders of all four caucuses backed a fiscally irresponsible budget. The problem is not a lack of information, the problem is a lack of political courage to stand up and make the tough decisions needed to get Pennsylvania’s finances back on track.

The creation of a legislative fiscal office is a boondoggle of the highest order. It will be just another useless bureaucracy churning out more numbers for legislators to hide behind. Worse, millions that could be spent on fixing roads and bridges, funding education, or a wide range of other core government services will instead go to legislative ego feeding. And with elections looming voters should hold their legislators accountable.

(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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