"Go big or go home!"
It's a favorite phrase of surfers and X Games competitors, but it's rarely one that encapsulates a presentation by a politician. That's why Gov. Wolf's first budget address was so startling.
Pennsylvania's new governor threw down the gauntlet by telling legislators that if they want to change the way the commonwealth does business, they need to make major changes in multiple areas. Cherry-picking favorite proposals will not cut it.
There is much to be done in Pennsylvania, so let's start with taxes.
Everyone knows the state's tax system is an anachronism that often does more harm than good.
On the corporate side, the structure too often rewards all the wrong economic decisions. The business community has been clamoring for changes not just in the level of taxes - everyone wants a tax cut - but in the type of taxes paid. There has to be a better way, but what is it?
And does anyone really think that funding education largely through property taxes is the sanest way possible? Well, no, which is why there are all sorts of additional nuisance taxes. Even when school districts impose earned-income taxes, townships can get half the pie. Did the legislators who wrote this law have any contact with reality?
On the positive side, there is the state's income tax, which is one of the lowest in the nation. But no one is asking if the level makes financial or competitive sense, especially given the commonwealth's revenue needs. And why is it a flat tax, rather than the graduated tax that 33 states have? "It is what it is" is not a good explanation. Maybe a change is in order.
But these examples only encompass the revenue side of the budget. Spending is the other half. Start with education.
Seriously, are Pennsylvanians pleased with being near the bottom of the national rankings when it comes to state aid to education, but toward the top when it comes to dependence on local funding? Heard any suggestions how to change that, other than the governor's?
Spending on infrastructure is also suspect. We don't have a stable, long-term funding structure for infrastructure, especially highways. With hybrids, electric cars, and rising fuel-efficiency standards reducing gasoline-tax revenue, the current approaches make no sense. Suggestions, anyone?
If you aren't depressed enough, we haven't even talked about social programs, health-care issues, or the underfunded pension system. None of these are small issues, and when it comes to solutions, our politicians speak loudly but offer precious few actionable ideas.
Change isn't easy, however. When it comes to public policy, the state's politicians must remember there is no such thing as a free anything.
Consider tax policy. Very simply, a tax cut reduces revenues, especially in the near term. So if you want to rationalize the irrational state corporate-tax structure, you have to either decide what category of spending should be cut because of the resulting revenue decline, or determine how to recoup the lost revenues, either by increasing current taxes or fees or passing new "revenue enhancements."
On the spending side, priorities must be set. Even if revenues increase, there still will be only so much money to spend.
Will the commonwealth finally live up to its responsibility to fund education at a greater level, fund its pension at its required level, or provide additional services for the poor?
Given the limited funds, without clear priorities, the budget process will be nothing more than the usual free-for-all, with every politically connected group grabbing for all it can get.
For the first time in a very, very, very long time, a governor faced the reality that budgeting requires big trade-offs. Pennsylvania has a lot of major issues it must address, and it can do that only by discarding the slogans. "No new taxes" means no new spending and no tax reform. That may be fine, but admit it.
I am not saying that all or even any of Gov. Wolf's proposals are the best ones. But they are great starting points, as they demand significant modifications to the status quo.
Unless our political leaders show some profiles in courage and make the difficult decisions that real budgeting requires, Pennsylvania will slip further behind in economic growth, educational funding, and infrastructure development. It is time the legislature and the governor go big. If not, they should simply go home.