Wednesday, January 28, 2009

Budget crisis tied to Rendell overspending

A guest opinion from state Rep. Curt Schroder, a Republican who represents the 155th House District in Chester County.
Budget crisis tied to Rendell overspending

The news is going from bad to worse for the state Treasury. Gov. Ed Rendell recently announced that Pennsylvania's budget deficit could exceed $2 billion by the end of this fiscal year.

Now, House Appropriations Committee Chairman Dwight Evans (D-Philadelphia) is traveling across the state telling citizens that lower than projected sales and income taxes, and the rush of newly unemployed citizens taking advantage of state-sponsored relief programs, are to blame.

Not so fast.

For Rep. Evans to suggest that the nation's economic downturn is the primary reason for our state's budget crisis is disingenuous. It is, however, accurate to say that it is the result of the Rendell administration's propensity to over spend. In fact, Rendell's budgets have routinely increased spending beyond the rate of inflation.

From 2002 to the current 2008-09 budget, state spending increased by 38.6 percent while the rate of inflation rose by only 19.5 percent. Even before the state budget was passed in July, there were signs that revenues were not coming in according to Rendell administration projections.

Several House Republicans strenuously objected to spending increases and the expansion of programs supported by one-time revenues, and Senate analysts were warning of deficits reaching into the billions. Inflated revenue projections and the use of one-time revenue sources are a prescription for fiscal disaster. Just weeks after the budget passed, Pennsylvania was in a financial crisis.

For eight straight months, the administration’s revenue projections have been well below estimates.

By the end of December, the state's revenue shortfall exceeded $814 million. Rep. Evans is telling citizens he will rely on federal economic stimulus money, the state's Rainy Day Fund and tax and fee increases to bail out the Commonwealth.

Economic stimulus money and the Rainy Day Fund would provide only temporary relief.

What Pennsylvania really needs are meaningful spending cuts and sound and sustainable fiscal policy. We cannot allow the mismanagement of the budget to be the excuse for a new tax increase.

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