Spend Like It’s 2007

NEWS RELEASE from the Commonwealth Foundation
12.02.08
Commonwealth’s revenue shortfall grows to $658 million

HARRISBURG, PA — The Commonwealth Foundation today renewed its call for restrained state government spending in the wake of a growing revenue shortfall.

The Pennsylvania Department of Revenue released the November revenue collections showing state General Fund revenues $93 million below estimate for the month, and now $658 million short for the fiscal year to date.

This shortfall exceeds the entire twelve-month shortfalls for fiscal years 1990-91 and 2002-03, respectively—budget cycles which resulted in the two largest tax increases in Pennsylvania history and significantly hindered the state’s economic performance.

"We should not repeat the mistakes of the past," said Matthew J. Brouillette, president of the Commonwealth Foundation. "Gov. Rendell and legislative leaders must reduce state spending immediately to 2007 levels—nearly $2 billion less—or they will severely hinder our economy’s ability to recover from the current recession. These spending reductions would not harm Pennsylvania’s most vulnerable citizens in need of taxpayer assistance."

Brouillette noted that between fiscal years 2002-03 and 2008-09, total state spending increased 35.8 percent ($16.2 billion), well exceeding the rate of inflation.

In Government on a Diet: Spending Tips 2008, a report released in February, the Commonwealth Foundation identified billions in potential spending reductions that would not harm Pennsylvania’s most vulnerable citizens in need of taxpayer assistance.

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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

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