Rendell's Final Days

Sam Rohrer weighs in on Rendell's growing budget deficit

He may have only six months left in his legislative career, but state Rep. Sam Rohrer is not going away quietly.

After May tax collection estimates confirmed Pennsylvania is facing a $1.2 billion budget deficit, Rohrer reiterated his contention that Gov. Ed Rendell has recklessly placed the Commonwealth in fiscal insolvency.

From a Rohrer press release:

"If Pennsylvania was a private company, it would be staring bankruptcy in the face," Rohrer said.

Rohrer, who serves as the Republican chairman of the House Finance Committee, noted that revenue collections through May were down by more than $685 million compared to the same point last year.

The Rendell administration initially projected a $3.3 billion annual increase in revenues, from $25.5 billion last year to $28.8 billion this year.

"Even utilizing the most elementary method of revenue projection, there was no defensible basis to predict anything other than a decrease in revenue projections," Rohrer said. "Coupled with the fact that Pennsylvania lags any national economic recovery - which still has not occurred - a revenue increase projection was without any legitimate justification. The governor has the unique duty to ensure that spending is connected to revenue collections, and revenue projections should always err on the side of understating projections. Now we are predictably faced with people still losing jobs, corporate tax revenues still declining, personal consumption decreasing and a governor who still insists that we spend yet more. The truth is that we now have debts that exceed our ability to pay - the definition of insolvency."

In addition to this unjustified approach to budgeting, Rohrer said, despite completely raiding the state's Rainy Day Fund to the tune of $750 million, raiding $800 million from the MCare fund and using other similar one-time funding sources, revenues have still failed to reach administration estimates.

"The administration raided these funds and it still isn't able to get the state in the black," Rohrer said. "The Rendell administration has used failed financing techniques and accounting gimmicks of overstating revenues and underestimating expenses and it is now undeniable. And yet, at the end of the day, they still haven't been able to make a $1.23 billion deficit disappear.

"On top of all of this, the governor claims that the state cannot reduce spending because everything is mandated. This, however, is simply not true. Continuing to spend recklessly despite lower revenues will either destroy any hope of economic recovery by raising taxes in the worst possible time, or will bring Pennsylvania face-to-face with bankruptcy."

Rohrer went on to cite state revenue statistics that May marks the 25th month in a row that the state collections have failed to meet the Rendell administration's projections, along with declining personal and corporate income tax revenues.

"The solution is to begin telling the truth to Pennsylvania citizens. Borrowing is out of the question. The governor cannot continue running to Washington to beg for more federal funds. Instead, he must take the lead to clean up waste, fraud and abuse. Instead of using state workers as bargaining chips, he must instead incentivize state workers to recommend ways to spend better and spend less.

"Our financial circumstances are dire and getting worse by the day. Stop the current nonsense and begin making decisions based on duty, financial reality and truth. We're running out of time!"

It should be noted that Rohrer was one of the few candidates for governor who talked seriously about the state's fiscal woes during the months leading up to the May 18 primary and what can be done to reverse the eight disastrous years under Rendell.

Video: Jack Wagner 'Pain in the Butt'

Pennsylvania Budget Deficit Tops $719 Million

Pennsylvania collected $3.9 billion in General Fund revenue in March, which was $243 million, or 5.9 percent, less than anticipated, according to Acting Secretary of Revenue C. Daniel Hassell.

Fiscal year-to-date General Fund collections total $19.9 billion, which is $719.6 million, or 3.5 percent, below estimate, Hassell says.

Pennsylvania Revenue Department Releases March Collections

PA $750M in the red, Rendell in denial

The Pennsylvania Department of Revenue is expected to announce on April 1 that March tax revenues are expected to come in $273 million below the official estimate.

Pennsylvania is expecting a year-to-date budget shortfall of $750 million for the current fiscal year, which ends June 30. The state ran up a $3.25 billion deficit in the previous budget year.

Despite the ocean of red ink, Gov. Ed Rendell is in full-blown spin mode.

"With the significant revenue month of April just ahead, it is important to wait and see how the major tax category collections come in before we make assumptions about end-of-year revenues," Rendell said. "At this point it would be premature to deviate from the plan that I have already presented to balance the budget.

Republican lawmakers are more realistic about the state's fiscal woes.

From The Associated Press:

A top Republican state senator says Pennsylvania's budget situation is worsening and says it's reasonable to expect a $1 billion deficit by July 1.

Senate Appropriations Committee Chairman Jake Corman said Wednesday that disappointing March tax collections are likely to bring the state's fiscal year shortfall to at least $700 million.

With three months to go in the fiscal year, the Centre County Republican says a $1 billion deficit, or more than 3 percent, is possible.

Corman says Democratic Gov. Ed Rendell should consider additional cuts in this year's budget.

However, Rendell said in a statement responding to Corman that a balanced budget is still within reach since April is also a big month for revenue.
He says it is important to wait before making assumptions.

Denial is a river that runs through Harrisburg.

Read Rendell's full statement at the link below:

Balanced Budget Still Within Reach Despite Weak March Revenues

Realtors Oppose Rendell's Proposed Tax on Professional Services in Real Estate Transactions

The way the housing market has been struggling over the past couple of years, is it really wise to impose additional taxes on home buyers?

The Pennsylvania Association of REALTORS® doesn't think so, either.

"Consumers in Pennsylvania will have to spend thousands of dollars more to purchase a home if Gov. Rendell's plan is enacted," said PAR President Don Roth. "Housing will become less affordable and beyond the reach of many Pennsylvanians."

From a PAR press release:

According to Roth, the proposed tax would affect every profession and service connected to a real estate transaction. In addition to paying a 4-percent tax on real estate agent/broker services, consumers will have to pay a 4-percent tax on appraisals, attorney services, credit reports, mortgage originations, home inspections, surveys, title searches, construction, architectural services and site preparation.

Read the full release at the link below:

REALTORS(R) Oppose Gov. Edward G. Rendell's Proposed Tax on Professional Services in Real Estate Transactions

Rep. Reichley: Rendell budget passed by House Dems is a 'sham'

Rep. Doug Reichley (R-Berks/Lehigh), vice chairman of the House Appropriations Committee, released the following statement after Tuesday's passage of House Bill 2279, Gov. Rendell's latest $29 billion red-ink budget proposal:

"It is no coincidence that the budget bill that passed today was voted on exactly 100 days before the June 30 deadline. Unfortunately, the governor and his allies would prefer to pass a bill that does not bear any reality to the financial difficulties faced by many families, businesses and organizations rather than to pass a fiscally responsible spending plan for Pennsylvania. The governor's proposal, passed with unanimous support from House Democrats, spends far more than the state is taking in, exceeding tax revenue by billions of dollars, and relying on deferred payments into state employee and teacher pension funds. Such reckless spending only compounds the problem we are currently facing.

"The governor's budget also unwisely uses a whistling through the graveyard approach by basing his spending plan on receiving $850 million in federal aid for Medical Assistance, the state-administered health care plan for the poor, elderly, and disabled in Pennsylvania. The problem is there is no telling if and when the state will receive those federal funds. The governor and his supporters in the House Democratic Caucus should have learned after seven years of missing budget deadlines that you do not achieve a balanced budget by crossing your collective fingers and wishing for federal aid.

"We need to act now to protect against tax increases in the future. We need to act now with further decreases in state spending. We need to fix foreseeable problems with the state employees and public school employees retirement systems before we reach the tipping point.

"Clearly, the bill that passed today is not the bill that will become law. It's a sham, designed to provide taxpayers with the illusion that the budget process has started in earnest. This is not a real, negotiated, fiscally sustainable budget. We will all end up paying for it, well beyond when the governor leaves office."

Rep. Quigley: Democrats' Budget Built on a House of Cards

State Rep. Tom Quigley (R-Montgomery) issued the following statement on the passage of House Bill 2279, which is Gov. Ed Rendell's proposed budget, minus the taxes Rendell wants to pay for the $29 billion spending plan:

"By relying on yet-to-be-approved federal funds, this legislation builds our budget on a house of cards. We should not allocate $850 million in federal money we only hope to get, but we should focus on the resources we know we have. This budget is the epitome of writing a check the taxpayers might not be able to cash, and it is irresponsible.

"For the past two budget cycles, Pennsylvania outspent its means. We are expected to end the year with a more than half-billion dollar deficit, which is a clear sign that this is not the time to increase spending. This budget calls for a $1.2 billion, or 4 percent, spending increase. Pennsylvania’s families continue to scale back their personal budgets, and this proposed state spending growth is not reflective of our current economy.

"I will continue putting my efforts into examining ways to make state government more efficient, and I am hopeful the Senate will amend this bill with a more realistic spending goal that will shield Pennsylvania families from future tax increases. We need to adopt a budget that is practical and sustainable."

The budget bill passed the House by a vote of 107-89, mostly along party lines, and now goes to the Senate for consideration. Since Republicans hold a 30-20 majority in the Senate, they will likely discard the Rendell/Democratic budget and craft their own spending plan.

Tuesday's House vote was essentially a publicity stunt by House Democrats. March 23 marks 100 days before the constitutional deadline to approve the budget for the 2010-11 fiscal year. You'll recall that the Legislature was 100 days late with in approving the 2009-10 budget.

Rohrer blasts House Dems for 'fiscally irresponsible' budget

Pennsylvania has spent $4 billion more than it has taken in over the past two years. Unemployment is at the highest level in two decades. The state's business climate continues to sink. Former and current state legislators are being hauled into court on corruption charges.

The "funny money" Barack Obama has sent to states as part of his "stimulus" package will dry up in two years. So what do the Democrats who control the Pennsylvania House do to show they're serious about the state's fiscal mess? They approved a $29 billion budget that is $1.2 billion higher than the current red-ink spending plan. And they have no way of paying for it. The budget the House passed along party-line votes Tuesday does not include any of the tax increases Gov. Ed Rendell proposed as part of the $29 billion budget.

So what is the most expensive state legislature in the country up to? State Rep. Sam Rohrer, an 18-year veteran of the House who is leaving to run for governor, has some thoughts about the state's fiscal woes:

"The current administration has led Pennsylvania down the path to fiscal insolvency," Rohrer said. "The budget approved today by the House is simply a continuation of the fiscally irresponsible practices of the last eight years. It spends too much, disregards financial reality and ignores the wishes of Pennsylvanians."

The budget bill approved today by the House was based on Gov. Ed Rendell's proposal outlined in his February budget address before the General Assembly. The bill calls for a $1.2 billion increase in state spending, which would drive up total state expenditures to in excess of $29 billion.

While the proposal calls for more than $29 billion in state spending, it anticipates only $26.2 billion in state revenues. Rohrer, who serves as the Republican chairman of the House Finance Committee, says the administration's revenue projections are far too optimistic.

"The budget approved today by the House is based on overstated revenues and underestimated costs," Rohrer said. "The state is already facing a half-billion dollar budget deficit for the current year. The administration and House Democrat leaders want to toss another $1.2 billion in spending on top of that through this budget proposal. Realistically, we are facing a $4 billion to $5 billion structural deficit, because that's how much state spending is outpacing our revenues."

Rohrer says revenues are likely to come in close to where they were in 2004 and state spending should be brought in line with where it was back then.

"The current administration cuts a dollar of spending with its left hand and then spends it somewhere else with its right hand," Rohrer said. "That is why state spending has increased by more than $8.6 billion since the administration took office. We need to make real cuts that root out waste, fraud and abuse from state spending initiatives."

Rohrer also argued that by passing the governor's budget proposal, House Democrats were ignoring the will of Pennsylvanians. In a recent Quinnipiac University poll, nearly half (49 percent) of respondents said the governor's budget proposal increases spending "too much." By comparison, only 6 percent of respondents said the governor's spending increase proposal was "not enough."

"Pennsylvanians are tired of lawmakers in Washington, D.C., and Harrisburg who refuse to listen to the people," Rohrer said. "This budget is a slap in the face to the taxpayers who foot the bills around here. They continue to speak out, but their voice was disregarded by the majority in the House of Representatives today."

The budget bill now heads to the Senate, where Republicans hold a 30-20 majority, for consideration.

House Dems Piling on PA Debt

Despite $4 billion in deficit spending over the past two years, Pennsylvania House Democrats want to increase state spending by another $1 billion for the fiscal year starting July 1. They just can't help themselves.

It's up to voters to end the madness by rejecting the tax-and-spend policies of Ed Rendell and his doormat Dems in the Legislature.

$29B budget up for Pa. House vote, GOP opposition - The Mercury

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House Dems push PA deeper in debt

While everyone's attention is focused on Obamacare, the Pennsylvania House of Representatives on Monday voted 104-85, mostly along party lines, to increase Pennsylvania's debt ceiling by another $800 million.

The vote puts the debt potential for Redevelopment Assistance Capitol Projects (RCAP) at a record $4.25 billion.

Rep. Curt Schroder (R-Chester County) voted against raising the debt and issued the following statement:

"It is the fourth time since Governor Ed Rendell took office that the debt ceiling has been raised," said Schroder. "The amount that Pennsylvania can borrow has shot up by 180 percent. The Commonwealth simply cannot continue to thrust mountains of debt on future generations of Pennsylvanians, particularly when they will also be saddled with massive debt created at the federal level."

As with any loan, the amount needed to pay off the debt is far higher than the amount borrowed. The debt service on RCAP projects in 2002-03 was $65.5 million. With the new debt ceiling now at $4.25 billion, the amount needed annually to cover the new level of borrowing will be $326.7 million - a 400 percent increase.

"In these economic times, we should be looking for ways to cut spending and to do more with less, just as the citizens of this Commonwealth are doing every day," said Schroder. "It is grossly unfair for future generations of taxpayers to be forced to pay for today's wasteful projects favoring the politically well-connected."

The House measure goes to the Republican-controlled Senate.

Cleaning up another Rendell mess

The Pittsburgh Tribune-Review notes that Pennsylvannia lawmakers need to revisit Act 1 of 2006, Ed Rendell's bogus scheme to stem rising property taxes. The legislation has failed miserably, much like most of Rendell's schemes.

From the editorial:

The 2006 state law that was supposed to give taxpayers at least some say in school budget increases has instead led to continuing property tax hikes -- with marginal public recourse.

Unlike in most states, Pennsylvania's 501 school districts have carte blanche to nose-thumb taxpayers -- most notoriously in union contracts, which become public after the dealing is done.

Pennsylvanians deserve a meaningful say in what their school boards spend. And voter referendums shouldn't be the exception to the rule. That change begins by reforming Act 1.

Read the full editorial at the newspaper's Web site.

Governor Rendell Announces Nominations, Appointments

The list includes Thomas Jay Ellis as the new Montgomery County Treasurer.

Ellis served four years as a Montgomery County Commissioner.

Governor Rendell Announces Confirmations

Revenue Department to close York office

The Rendell Administration will close a Department of Revenue office in York, consolidating operations in Harrisburg in a move that will save taxpayers $35,000.

That's a nice gesture, but since the Rendell Administration has run up a $4 billion budget deficit the last two years, the $35,000 savings will hardly be noticed.

Update: Department of Revenue to Combine York and Harrisburg District Offices in Cost-Saving Move

What's wrong with this picture?

Here's something I can't figure out.

Nebraska, with a population of under 2 million and an annual budget of $18 billion somehow found enough money to lure a Pennsylvania manufacturer(and up to 90 jobs) to the Cornhusker State, yet Pennsylvania, with 12.6 million people and a General Fund budget of $28 billion, couldn't come up with financial incentives to keep the jobs in the Keystone State.

What's wrong with this picture?

Can one of you Ed Rendell lovers out there shed some light on the subject? "Fast Eddie" is always bragging that he's pouring billions of dollars into economic development. How could he allow Nebraska to steal away a manufacturing firm that traces its Pennsylvania roots to the 1920s?

From an article in today's edition of The Pottstown Mercury about NEAPCO Components moving to Nebraska:

Neapco Components announced Friday it will be phasing out manufacturing at its Pottstown facility over the next 18 to 24 months, eliminating 70 to 90 jobs.

The manufacturing operations from Pottstown will be moving to Beatrice, Neb., said Neapco Executive Vice President and General Manager Keith Sanford.

"Why Nebraska versus Pottstown?" Sanford said. There were "financial incentives (offered) by the state of Nebraska."

Sanford said the move to Nebraska was an obvious business decision.

Read the full story at the newspaper's Web site.

Sen. Bob Mensch: State Budget Redux

State Budget Redux

By Sen. Bob Mensch

On Feb. 9, Gov. Ed Rendell delivered his eighth — and final — budget, and not surprisingly the greatest applause during the speech was for his statement to have the budget finished by June 30. It's not surprising this comment would be met positively. After all, last year was painful and caused a lot of financial difficulty for Pennsylvanians.

But when I'm asked if I think the budget will be done on time this year, my response is a skeptical, "I doubt it." The newly proposed budget is, in my opinion, not affordable, not sustainable, and must be rejected by the taxpayers and the legislature — but more on that in a moment.

First, let's look at history. We have not had a budget completed on time in any of the past 7 years — but that has not always been true. To find the next most recent budget that was not completed on time, you have to go back through many administrations, to I believe, Gov. Raymond P. Shafer in the late 1960s. So past performance by this administration is not encouraging.

And when we take a closer look at last year's budget mess, you will realize that the House majority leadership (Democrat) did not even put a budget in front of the House until July 13. That's right, despite the Constitutional requirement for a balanced budget to be completed by June 30, the House majority leadership decided to ignore the Constitution and do what it wanted. More importantly, last year's budget was unaffordable, just as this year's budget is unaffordable, so there is a great probability there will be another "battle" similar to last year’s 101-day impasse.

Some residents just want us all to go along and agree, but had we last year we'd have higher taxes this year, and we'd have even worse spending that we can't afford. Please realize that February 2010 is the 24th consecutive month of negative revenue collections by our state. That's right, we haven't been able to meet our spending obligations for two solid years. Yet this year's proposed budget has a further spending increase of $1.155 billion, and it includes two very significant tax increases — a sales tax increased designed to raise $1 billion or more; and an onerous business tax strategy that will chase more jobs out of Pennsylvania.

We can't afford the increased spending. We can't afford to pay more in sales taxes. We can't afford to lose any more jobs from Pennsylvania. So when someone suggests there is disagreement about this year's budget, instead of someone asking why we can't all just agree, the question should be why must the administration insist we need to spend more than we can afford?

The sales tax proposal will hurt our seniors with new taxes on medical and pharmaceutical services. We'll all pay more for financial and legal services. We'll all pay new taxes on 74 new categories of items to be taxed — we can't afford it.

Our businesses will be further stressed for providing jobs. Pennsylvania is already the 44th lowest state in new jobs creations. But the solution offered by the administration is to "close the Delaware loophole," which is actually a tax increase.

The easier solution is just lower our corporate tax rates to be competitive with other states — we presently have the highest rate in the nation - and then our businesses won't feel the need to incorporate in Delaware. But the strategy offered in the budget is actually a tax increase so don't look for a lot of compromise on corporate net income tax.

I welcome any comments regarding these thoughts. Call me at 215-529-1215 or write me at bmensch@pasen.gov

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

PA budget running $477 million in the red

The first rule of holes - when you find yourself in a hole, stop digging.

Unfortunately, Gov. Ed Rendell never learned that bit of wisdom.

As of the end of February, Rendell has spent $476.7 million more than the state has taken in for the current fiscal year, which ends June 30. That's called a deficit.

Over the past two fiscal years, Rendell has spent $4 billion more than the state took in. That's called a fiscal catastrophe.

The Pennsylvania Department of Revenue reports that Pennsylvania collected $1.5 billion in General Fund revenue in February, which was $102.3 million, or 6.4 percent, less than anticipated.

Fiscal year-to-date General Fund collections total $16 billion, which is $476.7 million, or 2.9 percent, below estimate, according to the revenue department.

For a breakdown of tax revenues collected, follow the link below:

Pennsylvania Revenue Department Releases February Collections

A case study in how to lose an election

A hilarious new political ad released by the Joe Hoeffel for Governor campaign proclaims Joe stands for "old-fashioned values" such as abortion-on-demand, gun control, same-sex marriage, protectionism and special breaks for unions.

This guy couldn't get elected in Massachusetts let alone Pennsylvania.

The final howler is when Hoeffel describes himself as "fiscally responsible."

Before Hoeffel took control of Montgomery County government in 2008, the county was a model of efficiency that other Pennsylvania counties could emulate. Montco government was so well run that the commissioners were able to cut property taxes while increasing services.

Under Hoeffel, Montgomery County has turned into an economic basket-case, facing deficits, layoffs and cuts in services. Cronyism is rampant as Hoeffel has hired all sorts of political allies to well-paying county jobs that didn't exist before Hoeffel came into the picture.

Now Hoeffel wants to do the same for Pennsylvania? Good luck with that.

Actually Hoeffel may be too late. His pal, Ed Rendell, has already bankrupted the state.

Prediction: Hoeffel will finish a distant third or maybe even fourth in the four-man race for the Democratic nomination for Pennsylvania governor.

Newspaper: Cut size of the Legislature to reduce state spending

Gov. Ed Rendell claims there is no place left to cut in the 2010-11 General Budget, which increases state spending by more than $1 billion.

But the Delaware County Daily Times had no problem finding ways to save taxpayers some money. Start by cutting the size of the Pennsylvania Legislature, the most expensive in the nation.

From a recent editorial:

More than “looking at reducing the size of the Legislature,” cutting the number of lawmakers and their support staffs should be the first order of business.

None of the following facts are news. Pennsylvania has 253 legislators — more than any of the largest states in the nation, including California and New York. The one state with more elected officials, New Hampshire, doesn’t really count since its 424 legislators earn $200 for a two-year term with no per diems.

Each of California’s 120 legislators earn more than Pennsylvania’s, but California’s salary total is still less than this state’s. On top of salary, our legislators’ benefits include per diem fees, health care, car rental, and, perhaps the most important perk about to hit Pennsylvania taxpayers in their pocketbooks — pensions.

Districts across Pennsylvania face massive increases in contributions to public school employees’ pension plans, starting this year.

In 2001, lawmakers wanted to hike their pensions by 50 percent. You read that correctly — 50 percent. In order to help that deal fly, legislators made a pact with school unions and boosted their employees’ pensions by 25 percent.

Now taxpayers are left holding the bag. Workers who lost jobs or pensions or watched employer-matched 401(k)s drop in half, Social Security recipients who will see no monetary increase for two years, employees still working but with pay cuts and health-care cost hikes — all will be responsible to refill the pension coffers of those already supported by taxpayer dollars.

Read the full editorial, "Cutting size of Legislature a smart move," at the newspaper's Web site.

Kicking Rendell When He's Down

You know Ed Rendell is a lame duck when his hometown newspaper, the same newspaper that has sugar-coated so many of Rendell's faults in the past, is doing critical stories on the gov.

From The Philadelphia Inquirer:

Battered by deep cuts last year, groups that offer services to the disabled, the elderly, and children are wincing at what they see in Gov. Rendell's latest proposed budget.

Rendell, delivering his eighth and final budget address on Tuesday, announced plans to trim some areas that touch the most vulnerable, such as literacy programs and disability payments for people living below the poverty line.

Small though they may be, the proposed reductions - along with the budget's reliance on hundreds of millions in federal recovery funds not yet approved by Congress - strike fear in the hearts of agencies that deliver food, health care, job training, transportation, addiction counseling, and child care to Pennsylvania's neediest.

"Rendell has always avoided hitting the poorest in the state," said Jonathan Stein, chief legal counsel for Philadelphia-based Community Legal Services. "This is contrary to his efforts over the last seven years."

Rendell's $29 billion spending plan contains nips and tucks across the board for most agencies, and no restoration of funding for some departments that took substantial hits last year, such as the Department of Environmental Protection and the Department of Conservation and Natural Resources

. Read the full story, "Fears that Rendell's budget shortchanges needy," at the newspaper's Web site.