OPED: We have a spending problem
Leaving Gov. Tom Wolf's budget address, I thought about a line from Apollo 13: “Houston, we have a problem."
Article VIII, Section 12 of the Pennsylvania Constitution stipulates: “Annually, at the times set by law, the Governor shall submit to the General Assembly” information on “a balanced operating budget for the ensuing fiscal year setting forth in detail: (i) proposed expenditures classified by department or agency and by program and (ii) estimated revenues from all sources. If estimated revenues and available surplus are less than proposed expenditures, the Governor shall recommend specific additional sources of revenue sufficient to pay the deficiency and the estimated revenue to be derived from each source”.
Other provisions of Article VIII, Section 12 require the governor to also submit information on a capital budget and a financial plan for the next five years.
While Wolf submitted these required materials, none of the information was part of his budget address to the General Assembly. Rather, his talk was more of a campaign speech.
I agree with the governor: Pennsylvania needs to put its financial house in order. However, I strongly disagree to address a structural deficit requires increased spending, borrowing, and taxation. While the governor’s spending proposal was quite clear ($32.7 billion), we had to search for his proposed tax increases, which include:
- Retroactively (Jan. 1, 2016) increasing the personal income tax to 3.4% percent (from 3.07 percent with “special poverty changes”: $1.278 billion more;
- Expansion of the Sales and Use Tax Base: $414.6 Million more (but no reductions in local property taxes);
- Cigarette Tax: $468.1 Million;
- Severance Tax: $217.8 Million (significantly lower than the previously estimated $1 Billion)
- Other Tobacco taxes: $136 Million;
- Insurance Premiums tax: $100.9 Million;
- Bank Shares tax: $39.2 Million, and;
- Taxes on lottery winnings: $16.3 Million
Over two years, these tax increases would amount to $3.6 billion to pay for increased spending of $2.4 billion.
During Gov. Ed Rendell’s tenure, average spending increased 4.1 percent. During the Corbett years, average spending increased 0.9 percent. Wolf's average in just two years is 6.9 percent. Especially troubling is debt service would account for 4 percent of the General Fund budget.
Under the last approved state budget, the Commonwealth spent over $29 billion: over $79 million a day, over $3 million an hour, over $55,000 a minute, $920.43 a second.
Under the governor’s proposed budget, the Commonwealth would spend $32.7 billion: nearly $90 million a day, nearly $4 million an hour, over $62,000 a minute, $1,036.91 a second.
Total state spending (state and federal moneys, Lottery Fund, Motor License Fund, and augmentations and fees) would be $80.2 billion: nearly $220 million a day, over $9 million an hour, almost $153,000 a minute, $2,543.13 a second.
I don’t believe we can spend, tax, and borrow our way to prosperity. Government should live within its means. It’s not that we don’t tax enough, we spend too much.
For those who don’t believe we spend and tax enough, I hope you’ll support my Senate Bill 555, the “Tax Me More Fund”, which would allow you to be the first to voluntarily send money to your favorite state programs.
— State Sen. Mike Folmer is a Republican representing the 48th District, which includes parts of York County.