Rohrer Calls for Immediate Re-Opening of Out-of-Balance State Budget: Says tax increase ‘guaranteed’

FOR IMMEDIATE RELEASE

September 18, 2008

Rohrer Calls for Immediate Re-Opening of Out-of-Balance,
Tax-Increase-Guaranteed State Budget

HARRISBURG – Representative Sam Rohrer (R-Berks) issued the following
statement today calling on Governor Ed Rendell and all PA House and
Senate Appropriations Committee Chairmen to immediately re-open and make
substantial spending reductions to the 2008-09 state budget.

“On July 4, 2008, I joined in the debate on the House floor against
final passage of the 2008-09 state budget based on the following
projections that were ultimately dismissed by Majority Leader DeWeese,
House Majority Appropriations Chairman Dwight Evans and several others
as premature and pessimistic:

1. The $28.3 billion spending plan that was approved by the General
Assembly on Independence Day is effectively unconstitutional because it
is demonstrably out of balance ignoring clear financial data and
accurate economic forecasts.

2. This year’s budget is problematic because it will predictably
force the legislature to completely defund the Commonwealth’s already
largely depleted $740 million Rainy Day Fund next year with no
justifiable emergency or fiscally responsible reason for doing so.

3. This year’s budget is fiscally out of balance because without
dispute the roughly 4 percent spending increase is more than twice the
rate of actual revenue growth (1.7 percent) over the previous 12 months.

4. Spending in this year’s budget is built on the extremely flawed
assumption of nearly 4 percent economic growth over the next twelve
months, when at best economic experts are predicting no more than 2
percent.

5. While there may be no broad-based new tax increases or fees in
this year’s budget, next year Pennsylvania taxpayers, at minimum, could
be asked to foot the bill for a $600 to $900 million budgetary
shortfall.

6. Even statements from Senate Democrat Appropriations staff and
the Senate Republican Appropriations Committee Chairman place the
deficit at between $800 million and $2 billion!

“Nearly 80 days later, a dramatic $117.5 million August 2008 revenue
shortfall and an unprecedented, yet absolutely insufficient executive
order from the governor for state agencies to reduce spending by just
$200 million, absolutely nothing has changed about the projections I
presented except they are now our state’s rapidly approaching economic
reality.

“With all due to respect to yesterday’s pledge on the House floor from
both the Democrat and Republican Appropriations chairmen to ‘meet and
monitor revenue levels on a monthly basis,’ the time for talking is
past. The time for action and specific spending reductions is now.

“Immediately re-opening the budget and realistically re-organizing our
fiscal priorities is critical to allow both the legislature and the
governor the ability to direct where these specific cuts need to
occur. It will also allow state government agencies ample time to
adjust to the inevitable line item and government service reductions
that must occur now rather than later to avoid saddling our children and
grandchildren with insurmountable debt for decades to come.

“Again, time and immediate action are of the essence. The legislature
and executive branch responsible for crafting and adopting this Rainy
Day fund-raiding, tax increase-guaranteed spending plan must take the
responsibility for balancing the unbalanced budget they enacted on July
4 today, rather than sitting idly by and allowing the next legislature
to take the fall when next summer’s billion dollar tax increase becomes
unavoidable.”

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