Saturday, October 31, 2009

Libertarian Party: PA budget adds up to bankruptcy

Pa. budget adds up to bankruptcy

By S. Douglas Leard

Gov. Ed Rendell has signed legislation to enact a 2009-10 budget of $27 billion for General Fund expenditures and $61.7 billion of total state operating expenditures.

Over the last 10 years, Pennsylvania's total operating expenditures have increased 65 percent. (Rendell has served as governor for seven of those years.) Though Rendell called this "a responsible budget," state government will spend more than $11,250 per Pennsylvania household. According to the U.S. Census Bureau, median household income in Pennsylvania was $48,562 in 2007 (latest available numbers). This means that Pennsylvania government is extracting and spending (on average) more than 23 percent of every dollar each household earns.

Of course, this does not count the money extracted and spent by federal and local government. Nor does it include government's debt and unfunded obligations which, according to the 2009 Fall Report from the General Accounting Office, exceed $480,000 per household.

Government is reaching deeper and deeper into our pockets, our children's pockets and our grand-children's pockets. This is a very dangerous trend.

Pennsylvania's budget depends on tax increases including $1.5 billion from a retroactive increase in the Capital Stock & Franchise tax, which Gov. Rendell said was the most harmful to Pennsylvania's business climate. The budget also relies on $2.6 billion in federal fiscal relief and $2.1 billion in onetime revenue including draining Pennsylvania's reserve fund by $375 million.

The budget does nothing to address looming fiscal crises in Medicaid and pension fund payments. According to the Hospital and Healthsystem Association of Pennsylvania (HAP), Medicaid already accounts for 30 percent of the state budget and "in the midst of the economic downturn, Pennsylvania Medicaid spending and enrollment… is expected to grow faster." Meanwhile, pension fund payments are expected to increase from $550 million this year to over $4 billion in 2012-13.

Harrisburg bureaucrats, with help from Washington, are taxing and spending us to a point where we, and our children, will be slaves to the state. We must change direction.

The Commonwealth Foundation has offered a series of reforms and spending cuts that move Pennsylvania in a new direction. The reforms include eliminating corporate welfare, reforming Medicaid to give individuals more control over their health care spending, and repealing prevailing wage laws. Pennsylvanians must stand up and demand a new direction in our state government, a direction toward restoring fiscal control and limited government.

The Libertarian Party is the third largest political party in Pennsylvania and the United States. More than 200,000 people across the country are registered Libertarians, and Libertarians serve in hundreds of elected offices. Please visit or for more information.

S. Douglas Leard is chairman of media relations for the Libertarian Party of Pennsylvania.

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