Sen. Mensch: Time to pass a budget that Pennsylvania can afford

It is time to pass a budget that Pennsylvania can afford

By Senator Bob Mensch

Over the next several weeks, the Pennsylvania General Assembly will set the course for Pennsylvania’s economic future as we consider the state budget for the 2010-11 fiscal year that begins on July 1. Foremost in this debate will be two basic options: will we spend only what we can afford; or, do we mortgage the future through increased spending and higher taxes?

In the previous seven years of the Rendell Administration, there has never been a timely budget and at this point it is unlikely this year will be much different.

Last year, Pennsylvania went 101 days into the new fiscal year before a budget was finalized and many residents wanted to know why the debate took so long. It was bloated and unaffordable, just like the Governor Rendell’s budget proposal for FY 2010-11. Perhaps the only difference between last year and this year is that we have one more year of experience in a depressed economy and taxpayers are even more concerned about increased and uncontrolled government spending.

In that light, this year's proposed budget -- including a $1.2 billion increase in spending over last year -- is a potential fiasco. It's as if the Administration is not listening to the public's concerns about expenditures and unnecessary growth in state government.

State spending has increased by 40 percent over the last seven years, yet how many residents have seen a corresponding 40 percent increase in state services? Unchecked spending increases have led to an unaffordable and unsustainable budget situation

For the last 26 consecutive months Pennsylvania has seen revenue collections come in well below projections. So far this fiscal year, we are already $1.2 billion below projections and that total could easily reach $1.6 billion by June 30.

Revenues are down because residents are driving less (gas tax), buying less (sales tax), not purchasing homes (real estate transfer tax) and most sadly, earning less (earned income tax). In fact, the unemployment situation in our state is horrible. We have an unemployment rate of 9.0 percent, but Pennsylvania also has the 2nd most unemployment claims in the U.S. To pay our unemployment claims, we're actually borrowing $100 million per month from the Federal government. Furthermore, Pennsylvania is now down to 45th (we were 44th last year) in the U.S. in new jobs creation.

In spite of those dismal revenue figures and economic statistics, the Governor still wants to increase spending and do so by adding to the burden on Pennsylvania taxpayers. The Administration’s new sales tax "scheme" will cost taxpayers an additional $1 billion and will impact all consumers -- regardless of how anyone tries to spin it. There's also a very burdensome surcharge on employers which will serve to drive even more businesses and more jobs out of Pennsylvania.

Bad tax policies have put us in this economic hole. Pennsylvania is the 11th most taxed state in the nation and we have the absolute worst business tax structure. Our business tax policy is chasing employers and jobs out of Pennsylvania and our personal tax policies are making each of us poorer every day as we try to sustain unaffordable state spending.

In addition, the Administration is insisting on using $1.4 billion in federal stimulus money to balance the budget. This is not a sound fiscal practice since this is the last year for stimulus money and that lapse will mean that next year's state budget will be out of balance by $1.4 billion from the start.

I welcome any and all comments regarding the budget – I along with my legislative colleagues continue to seek the right answers and the right balance in the budget. Let me hear all your ideas, please!

In closing I believe we must reject the proposed budget in favor of a reasonable, affordable, sustainable spending plan that does not impose additional financial hardships on our taxpaying residents and employers. We have to turn the ship now, right away. There are many valuable programs in his budget, but in the interest of Pennsylvania's taxpayers and its future we need to be honest with ourselves about what we can actually afford

State Sen. Bob Mensch is a Republican who represents the 24th Senatorial District, which includes portions of Montgomery, Bucks, Lehigh and Northampton counties.