Upon taking office in 2011, Governor Corbett and his administration were faced with a daunting task. They commenced with a multi-billion dollar state budget gap, no federal stimulus funds and a pledge to avoid tax increases. During his tenure, the Governor was able to balance the budget while maintaining his taxpayer protection pledge. Despite the criticisms posed by the minority party, Governor Corbett’s initial budget was a significant step towards fiscal responsibility for the Commonwealth. In timely fashion, as the Governor prepares to debut his second address relating to the budget on February 7th, Rep. Tim Kreiger unveiled a legislative milestone which would make unsustainable spending sprees a thing of the past. This type of legislation coincides with the founding principles of Keystone Liberty.
Last Wednesday, Rep. Krieger introduced House Bill 116. The proposed legislation calls for a constitutional amendment which would place a cap on state government spending. The established spending limits are based on the previous fiscal year’s levels with annual adjustments made for inflation and population growth. In order for a constitutional amendment to be ratified, the legislation must be passed by a majority vote in two General Assemblies. Before the legislation is adopted as part of the state constitution, it must then pass by a majority of the entire electorate. The amendment process also specifies that no particular legislation may be submitted more than once in five years. While this amendment is promising for Pennsylvania’s future, long-term efforts are crucial for the success and sustenance of this legislation.
To comprehend the dire necessity for a constitutional spending cap, one needs to appreciate the alarming trends in the state operating budget. For more than four decades, the state government has undergone an immense expenditure escalation of more than 164 percent after adjusting for inflation. The spending increases have outpaced Keystone resident’s incomes to the point that the total budget now represents more than 13.1 percent of state income compared to less than the 9 percent in 1970. With such massive spending, it is no surprise that Pennsylvania has the 10th highest state and local tax burden in the nation. Despite the onerous burden, the government’s spending craze has resulted in tremendous debts. Between 2002 and 2009, state debts have increased by more than 82 percent equating to a total of more than $42 billion. Local and school district debt has also increased by more than 25 percent to total more than $82 billion. Additionally, there are more than $50 billion of unfunded state and local pension liabilities. Combined, these debts and unfunded liabilities total approximately $200 billion. This amount represents more than three times the entire state operating budget. The magnitude of this debt poses a tremendous threat to Pennsylvania’s future.
It is of the utmost urgency to concentrate efforts in favor of the state constitutional spending cap of HB 116. Following a successful first year, the Governor must continue to outline budgets that follow the principles of fiscal responsibility and limited government. In addition to maintaining sustainable budgets in the short-term, the Governor and the General Assembly must support the spending cap legislation. This legislation will ensure that the Commonwealth avoids traveling down the previous paths of overspending of year’s past. After constitutionally reigning in the growth of government, Pennsylvania will be in a promising position to move forward to address its debt, while finding solutions to reduce growing unfunded pension liabilities.
