State of spending in tough times

By Sam Rohrer

As the 2008-2009 state budget negotiations shift into high gear, Gov. Rendell must aggressively reformulate his fiscal priorities to keep the commonwealth from lapsing into a statewide recession.

Unfortunately for Pennsylvania taxpayers, to this point, the driving forces behind "Rendell-onomics" still revolve around the Big Three - increasing taxation, increasing spending, and increasing debt.

"Seeking Solutions," an article in the March issue of State News magazine, offers many fiscally responsible budgetary strategies that more than a dozen governors across the nation are embracing to address many of the same problems and spending priorities currently facing Pennsylvania. These include the fair and equitable funding of education, law enforcement, and necessary infrastructure improvements.

Recognizing that inflation is growing even more unpredictable and taxpayer revenues are flatlining nationwide, newly elected Kentucky Gov. Steve Beshear used his inaugural budget address as a platform to announce an across-the-board state spending reduction due to the "cooling of the housing market, oil prices, and a gap between what we spend and what we earn" and "an unprecedented budgetary shortfall."

As the chief executive of the only state in the union during 2007 that was forced to implement a midyear state spending recall, Wisconsin Gov. Jim Doyle announced even more proactive steps to prepare for a national economic downturn, stating that "America's economy is in deep turmoil" and that this year would be a year of great challenges.

Upping the zero-growth budgeting ante even further, New Hampshire Gov. John Lynch offered this bold pledge during his annual budget address: "Barring an emergency, I will not support any bills that require additional spending this year."

Similarly, South Dakota Gov. Mike Rounds promised not to commit to any "expensive new programs or huge increases in existing programs, because we don't have the money to do so. We must live within our means."

Most interesting to Pennsylvania taxpayers, New Jersey Gov. Corzine's 2008-09 remedy to address the Garden State's gaping $32 billion revenue shortage is also to initiate a zero-growth spending freeze. "We are in a hole and if we want to get out, we have to stop digging," justified Corzine. ". . . For nearly 20 years both parties bonded, begged, and borrowed money from every pot we could find to fund a growing appetite for spending."

From Arnold Schwarzenegger in California to Donald Carcieri in Rhode Island, governors across our great nation in Delaware, Maryland, Kentucky, Maine, Massachusetts, Mississippi and South Carolina are exploring both traditional and new ways to terminate state spending increases.

Yet despite Pennsylvania's national rankings (49th in job growth, 45th in personal income growth, and 48th in population growth among the 50 states) Gov. Rendell's annual budget address did not pay one word of lip service to the tenets of fiscal responsibility or limiting the growth of government spending.

Overall, his $28.3 billion budget proposal for 2008-09 features more than $1.6 billion in new spending - 6.1 percent more than last year's budget. While the governor has publicly acknowledged that a recession is a distinct possibility, he continues to foster the idea of tax, borrow and spend as the panacea for Pennsylvania's fiscal problems.

After increasing spending by more than $7 billion in only five years, the governor is once again clenching his fists and demanding that Pennsylvania taxpayers allow him another opportunity to "strategically invest" at least $2 billion more of our hard-earned money in order to "stimulate" the economy.

If state government has failed to deliver a tangible rate of economic return for Pennsylvania's families in terms of property tax relief, job creation, improved roads and bridges, and reduced energy prices with $7 billion over five years, what reputable financial institution would hand over an additional $2 billion based on even more empty promises? How much spending is enough?

For many years, I have argued for the answer: adopt a zero-growth state budget that contains no more taxes, no more spending, and no more borrowing. Failure to restrain out-of-control spending is no longer an option that Pennsylvania taxpayers can afford.