Senate Democratic Appropriations Chair Vincent Hughes derailed Governor Corbett’s budget address as a fiscal plan that takes Pennsylvania in the wrong direction. Senator Hughes asserts that the budget awards the Governor and his “wealthy friends” tax breaks and only offers working people a proposal to “put booze on every block in every community.” This rhetoric grossly mischaracterizes privatization efforts and the serious issue of liquor control and public safety. Continue reading
Liquor store union boss Wendell Young IV claims liberation from a government monopoly will jeopardize public safety. It’s just his latest misrepresentation of the facts to save his nearly $300,000 salary and benefits package he makes off the backs of Pennsylvania workers and taxpayers.
Democratic party leaders within the General Assembly continue to send a message insinuating that the Governor’s budget is an assault on working families. House Democratic Leader Frank Dermody (Allegheny) took the floor early in the budgeting process to voice his stern disapproval of the plan for a balanced budget. In his critique, Rep. Dermody called the proposal “year two of the Corbett property tax hike agenda” and further condemned the budget as an “unprecedented attack on public education.” Such fiery floor rhetoric fails to foster an honest debate concerning the state of education funding in the Commonwealth.
For years, budget negotiations have been burdened with unyielding challenges designed at reversing the Commonwealth’s financial footing. Lawmakers are now facing the consequences of decades of unsustainable government spending. The Great Recession met with a harsh reality as tax revenues dropped substantially. With sluggish growth, Pennsylvania’s families are faced with the constant struggle to make ends meet. In a step in the right direction, the Corbett administration ruled out tax hikes as a means of balancing the public ledger. Fiscal responsibility is clearly associated with tough decisions as significant spending cuts continue to be made. In difficult fiscal times, there is no room for fraudulent entitlement claims. To this end, House Republicans have introduced legislation designed at cracking down on the abuse of unemployment benefits.
According to PA Independent, taxpayers funded more than $367 million in overpayments and fraudulent claims last year alone. This equates to a 10 percent payment error. Unfortunately, this mismanagement of taxpayer money has totaled more than a billion dollars since 2008. There have even been reports of prison inmates collecting benefits. It is an injustice that valuable programs and services are facing substantial cuts when the state government is wasting tremendous sums of money on fraudulent entitlement claims.
The bills proposed by the House Labor and Industry Committee would eliminate existing limitations for curtailing fraud and prohibit those individuals who choose to quit their jobs from receiving benefits. It is clearly an oversight that these common sense measures were not incorporated into unemployment benefit practices at its inception. The Democratic chair of the committee seems to be overlooking such common sense practices along with the billion dollars in government mismanagement. The Philadelphia Democrat exclaims that these measures will only make it “harder” for people to collect benefits in times of need. Yes, it would be harder for those individuals who illegitimately receive benefits based on fraudulent claims.
The Democratic chair also claims that these reforms will not address the unemployment fund’s insolvency. If the Representative was truly concerned about solvency, he would have pushed for these bills four years ago and saved more than $1 billion. The Commonwealth now owes more than $3.7 billion to the federal government unemployment fund. This outlandish debt is set to collect interest. If Pennsylvania is unable to pay, the federal government will be forced to impose higher unemployment taxes on working Keystone residents.
The stakes are high in the budget process and Republicans must pass the reform provisions for unemployment compensation. Pennsylvania cannot afford to waste money on overpayments and fraudulent claims. The Commonwealth already owes billions to the federal government. Putting an end to cases of abuse is the first step toward reaching a state of solvency. Lawmakers must meticulously examine areas of waste and abuse in other government agencies and departments before cutting health and educational services.
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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.