DN Editorial: Coal already, from Congress and Harrisburg

WE KNOW Christmas is a few days away, and so maybe we shouldn't be so depressed about the giant lumps of coal left in our stockings already - one from Congress and one from Harrisburg.

Actually, Congress' action to kill a payroll tax cut for working Americans, and Harrisburg's announcement that revenue shortfalls will lead to big cuts to close a $500 million hole in the new state budget gives coal a bad name.

Besides, coal is cheap, and these actions will be expensive.

For example, Congress' refusal to extend payroll tax cuts will cost a family with $50,000 in income about $1,000 a year.

It's unclear yet what Harrisburg's actions will cost us, but it won't be pretty, especially coming off the grueling cuts last year of more than $1 billion.

The Corbett administration blames the state's woes on a still-weak economy. But the economy isn't some distant entity whose whim we must accommodate. The state helps create the economy, primarily by growing jobs. Working people spend money, which keeps the economy vibrant. (And P.S.: that includes people who work for the state.) Job creation requires a combination of policies, not a single "no-tax" pledge - which both Corbett and many members of Congress have taken.

In Pennsylvania, that tax resistance has played out most dramatically in the refusal to impose taxes or fees on the Marcellus Shale gas-drilling industry. The General Assembly ended its most recent session failing again to resolve this. According to the Pennsylvania Budget and Policy Center, proposals that were left on the table could have generated $122 million in fiscal year 2011, and between $120 million and $362 million in 2012-13. Much of this revenue would compensate local governments for costs they are incurring now from drilling, but also could have helped pay for core public services.

Meanwhile, it's important to remember that the Corbett administration's promise to impose no tax increases to cope with the budget hole is a bit disingenuous, since many municipalities will be raising property taxes to compensate for cuts from the state.

In fact this fundamentalist belief in the evil of taxes on corporations and the wealthy - especially since the connection between taxes and job creation is tenuous - is more and more delusional. Government must balance both revenue and spending.

Spending cuts alone are not enough. Failing to raise revenue and expecting a balanced budget is about as productive as continuing to believe in Santa Claus.