Taxpayer Debt for Political Favoritism Needs Reform

It is evident that state politicians out of Harrisburg face many of the same challenges of their Washington counterparts. Lawmakers in both capitals are overseeing immense budgetary challenges, ballooning debt to GDP ratios and an ever-increasing amount of unfunded entitlements and liabilities. These problems are readily traced to generations of dramatic spending increases that perpetuated the size of government to unsustainable levels. Despite the fiscal circumstances, legislators continue to appropriate funds and take on more debt for pork barrel projects and earmarks. Whether it be the infamous “Bridge to Nowhere” or the Arlen Specter Library, lawmakers turn to taxpayer dollars for pet projects. The General Assembly is now looking at new legislation aimed at reforming private development projects.

State officials are currently evaluating the Redevelopment Assistance Capital Projects (RACP) program. Established in 1986, the capital projects fund received $400 million in exchange for a promise to bring jobs and make substantive investments for economic growth in Pennsylvania. When passed by the General Assembly and signed by the Governor, the RACP allocates debt-funded grants to private developers. Like most government programs, the debt-ceiling of the program increased eight times between the funds inception and 2010. In just 24 years, RACP demonstrated a borrowing capacity of $4 billion, which represents an outlandish 1,000% increase.

Gary Smith, of the Chester County Economic Development Council, served as the administrator of many projects, which were funded by the RACP. When questioned about the program, Smith readily refers to the RACP as a “political process, first and foremost.” He further acknowledges that the RACP has been both abused and manipulated by legislators. Frequently, firms petitioning for grants hired lobbyists to appeal to legislators for taxpayer funding for their private development projects.

Leading the dialogue for reform is House Leader Mike Turzai. Rep. Turzai shares Mr. Smith’s view regarding the program’s maligned history. The current proposal consists of gradually reducing the programs debt ceiling from $4 billion to $1.5 billion over a period of 20 years. In addition, there is a motion which would require public hearings before the approval of RACP grants. Senate Majority Leader Dominic Pileggi supports more rigorous reductions than the proposed timetable. Governor Corbett also campaigned against these corporate welfare programs. While these reforms are promising, they are gradual and still leave ample leeway for political favoritism and government handouts to private development at the taxpayer’s expense. A serious commitment to reining in spending and debt must be accompanied by the elimination of pork barrel spending.

Similar to elected officials in Congress, the General Assembly is reluctant to eliminate spending on pet projects. As Senator Pileggi explains, fiscal responsibility includes the close re-examination of every government program. Now more than ever, it is imperative to prioritize the way government spends citizen’s tax dollars. Pennsylvanian’s are being forced to make ends meet with less. Legislators must act responsibly and follow suit by sacrificing their politicized spending grants. Citizens contribute enough in taxes and deserve to have their money spent with prudence. The path to a government that lives within its means requires changing business as usual in Harrisburg.

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