As the General Assembly begins another budget season, it's time to admit that Pennsylvania needs to overhaul state government.
In the midst of a 21st-century economy driven by new technology and fundamental changes in the markets, we are still using a formula dating to the early 20th century when economic change was glacial and industrial growth assumed.
We started down this path to rethink state government when the General Assembly last summer put another of my bills on the governor's desk to allow the private sector to sell wine. There is no rational reason for state government to be in the wine and spirits business. Thank goodness, he signed our legislation, which needs further expansion.
We need to do so much more - streamline the role of government and make it more efficient in meeting the real needs of Pennsylvanians.
We need to grow our economy by facilitating the growth of energy production and distribution within the state to allow manufacturing to flourish again.
We need to reduce the size of state government, including the legislature and executive departments and agencies.
We need high schools and higher education to educate students for good, private-sector jobs.
We need to close institutions that are not efficient and no longer providing quality services at reasonable costs.
We need to change the fundamentals of how we do state budgets.
Pennsylvania is long past the era when legislators could simply plug in last year's spending numbers and cast about for new revenue from taxpayers already groaning under the burden of a state government that is too big, too unresponsive, and too expensive.
Since 2001, in the face of nearly flat or nonexistent annual inflation, Pennsylvania's general fund budget has grown $20 billion to $31.5 billion - a more than 50 percent rise.
Has government has become 50 percent more efficient? Have we increased our services by half?
Certainly, family incomes haven't risen at that rate. Census calculations show median family income in our state rising by a mere 13.5 percent over the same time period.
We need to bend the cost-curve downward and embrace the concept of zero-based budgeting. It's a system in which we start from zero and build a budget according to what Pennsylvania - and its taxpayers - can afford.
We need every department and every program to justify its existence, and quantify its accomplishments and failures. We need to focus our spending on what works best for Pennsylvanians.
We need to start with available revenues for 2017-2018 - we already tax personal income, sales, estates, business income, tobacco, wine and spirits, and other items - and determine how to prioritize spending based on those revenues. And in the face of bureaucratic enthusiasm for borrowing, we have to face the truth that debt has to be paid back by future taxpayers - it is not free money.
In 2004, our Capital Facilities Debt obligation was $6.89 billion. Last year, that number increased to $12.57 billion, an 82 percent jump over a period in which accumulated inflation rose by 27.7 percent.
Taxpayers spend an increasing share of the annual budget just to pay down that debt. In 2004, the amount was $799 million. Last year, that amount had risen to $1.32 billion annually.
The annual debt service for Redevelopment Assistance Capital Projects has gone from $109 million in 2004 to $333 million last year.
Our pension funds are $60 billion underfunded, and yet we have not "turned off the spigot" by enacting defined contribution plans - like the private sector - for new public-sector hires.
In short, we're spending money we don't have and trying to replace it with money we can't find.
For decades, Pennsylvanians have heard officials assure them that we're only one more tax increase away from solving our budget problems. Every time the taxes are increased, the spending increases in commensurate amount and then some. We heard that when the personal income tax was first introduced. This system is not sustainable.
We need to change. We're in a new era, and it's time to act accordingly.