Senate Takes Step to Put PA on Spending Diet

Commonwealth Foundation applauds WAM-free, low-growth budget

HARRISBURG, PA — On Wednesday, the Pennsylvania Senate passed a 2007-08 budget in the spirit of the Taxpayer Protection Act. This $27.0 billion budget restrains the growth of General Fund spending to 2.7% over the FY 2006-07 available budget (and 3.4% above the 2006-07 budget enacted last July). This budget proposal also contains $191 million in “supplemental appropriation” considered part of last year’s spending. Unlike some of the charades of past years, this budget represents a measured effort to pass a realistic spending plan.

The legislation (HB 1286) now goes back to the House, where a delay by House Democratic Leadership is expected. Three of the four legislative caucuses have supported this spending plan, as the Senate voted 49-1 in favor of this bill, and House Republican leaders have indicated strong support for a budget that is in line with inflation. However, House Democrat Appropriations Chair Dwight Evans has threatened to hold off a vote on the budget unless several of Governor Rendell’s proposed spending initiatives, including new taxpayer subsidies for mass transit, are included.

“For years, taxpayers have asked lawmakers to control government spending, keep their taxes from growing, and reduce waste,” said Matthew J. Brouillette, president and CEO of the Commonwealth Foundation. “Taxpayers deserve to have the House vote on a budget that holds the line on spending growth and truly contains no new taxes or borrowing.”

While this budget contains a nearly $400 million increase in K-12 education and over $450 million in new public welfare spending over last year, many wasteful programs have been excised. Several corporate welfare programs, and all of the “Walking Around Money” or WAMS—programs the Commonwealth Foundation targeted in its Pennsylvania Piglet Book and in its PA Diet Plan—have been removed.

“Some of the most egregious examples of pork, including the indefensible WAMs, have been cut out,” stated Brouillette. “While there remain plenty of examples of waste, this budget represents a step in the right direction.”

Also excised from the budget was Governor Rendell’s “Pre-K Counts” proposal to spend $75 million for increased state control over preschool education. The Commonwealth Foundation joined with a number of organizations earlier this month calling on “Pre-K Choices” as an alternative to the Governor’s proposal. “Pre-K Choices” would expand the preschool Educational Improvement Tax Credit and keep control and choice in preschool education in the hands of parents rather than government bureaucrats.

Although the budget passed by the Senate includes no new taxes or new borrowing, many of Governor Rendell’s initiatives are not included as part of the budget, and may be voted on later. These include issuing more debt for corporate welfare handouts to alternative energy companies (funded by higher electricity taxes), more debt to fund politically connected health researchers, a tax on oil companies to pay for mass transit, and a payroll tax to fund an expanded government-run health insurance program.

“If enacted in its present form, this would be the first time legislators passed a budget that had less—not more—spending than Governor Rendell requested,” said Brouillette. “While there are many more battles left to be fought, we applaud the Senate for fighting to protect the taxpayers from more runaway spending in Harrisburg.”

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The Commonwealth Foundation (http://www.commonwealthfoundation.org/) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

PADietPlan.com, a project of the Commonwealth Foundation, is an educational campaign to restore Pennsylvania's fiscal and economic health through a three-step program of spending restraint, taxpayer control, and tax reduction.  For "The Pennsylvania Diet Plan: Three Steps to Fiscal and Economic Health," go to http://www.padietplan.com/.

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