Rock, Paper, Scissors

Member Group : Lincoln Institute

As Tom Corbett prepares to take office in a couple of weeks as Pennsylvania’s new governor the array of problems awaiting his attention are varied and substantial. His first order of business will be to bring the state budget into balance. In dealing with the budget deficit the new governor might be wise to adopt a rock, paper, scissors approach.

Estimates of the budget deficit range from $4 billion to $5 billion. Having pledged not to raise taxes, the new governor has no choice but to take out his scissors and cut spending. Such an approach is long overdue. The Commonwealth Foundation has pointed out that if over the last eight years state spending had only increased by the rate of inflation Penn’s Woods would today be enjoying a surplus rather than facing a deficit.

Governor Corbett will not be able to balance the budget by simply making a few minor cuts. The patient is in critical condition and radical surgery is needed. He can start with the areas of the budget that have seen the biggest growth in recent years: welfare, prisons and education.

Auditor General Jack Wagner has estimated that as much as 15% of the welfare department’s budget is squandered on waste and fraud. Other studies place the percentage lower, but everyone agrees there is waste and fraud. Where Ed Rendell’s welfare spending promoted a dependence society, Tom Corbett must adopt policies that move people off welfare and into work. Such an approach was successfully implemented by many states during the Clinton era and it will work in Pennsylvania today.

Another area that has been over-funded in recent years is public education. While Governor Rendell claimed the spending increases were for the benefit of the children, the reality is it simply enriched teachers and administrators while failing to make any significant impact on test scores. The time has come to reduce costs, and to give parents more control over their own children’s education by giving them school choice options.

Prison spending is also out of control. The corrections budget has skyrocketed from $94 million in 1980 to $1.7 billion today. Pennsylvania leads the nation in prison population growth and fails to innovate in alternatives to incarceration such as electronic and cyber monitoring.

Pennsylvania’s debt obligations are another component of the fiscal disaster Governor Corbett will face upon taking office. According to the Commonwealth Foundation, the amount of paper debt incurred during the Rendell Administration rose by almost $2 billion or 28%. Further, the foundation reports, "Rendell increased debt held by state agencies like the Turnpike Commission and the Commonwealth Financing Authority by a whopping $16 billion or 93%."

As a result of Rendell’s borrowing spree, the share of the debt owed by each and every Pennsylvanian, including our children and grandchildren, now stands at $3,313.00. And, the Commonwealth Foundation points out, that "doesn’t even include the $3 billion deficit in the state’s unemployment compensation fund or the billions in unfunded pension obligations for public employees."

In order to address these problems Governor Corbett and the Republican leadership in the General Assembly are going to have to stand like a rock on their party’s principles. State over-spending and massive debt have occurred because powerful special interests have successfully lobbied for the money. They are not going to stand by and watch their gains of the past eight years cut back without a fight.

Just last week the Pennsylvania State Education Association (PSEA), the union which represents state teachers, announced it is increasing dues by eleven percent. That is happening for one reason only: they are building a war chest to fight the budget cuts Republicans are sure to propose. And, with a number of Republican lawmakers in their pockets, the PSEA will be a force to be reckoned with regardless of the new GOP majority.

And so, Governor Corbett must stand like a rock, curtail the use of paper, and take scissors to the state budget. It is the only way to honor his no new taxes pledge and to put Pennsylvania back on the road to financial solvency.

(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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