Jul 15, 2011

Reaping the benefits of single-party government


Guest Column by Dwight Weidman

Gov. Tom Corbett and members of the General Assembly have passed a fiscally responsible, reality-based budget that puts Pennsylvania on a course towards job growth and economic prosperity.

Republicans are forcing government to live within its means with a budget that decreases bloated government spending without raising state taxes by a single cent.

Republicans have honored Pennsylvania's constitutional mandate to pass a fiscally responsible budget on time. This is the first time in eight years that a state budget has been passed before the June 30 deadline. During those eight years, spending increased by 37 percent while inflation grew only 21 percent. It's clear that the practices of the past were not sustainable and were in desperate need of change.

Our new pro-growth, job-friendly budget decreases government spending by about 4 percent, or approximately $1 billion in reductions. This is the largest decrease in government spending in generations.

Gov. Corbett and Republicans in the General Assembly have trimmed their own spending by reducing the cost of administering state government by 10 percent over the next four years. This includes eliminating more than 1,500 positions in state government, many of which are vacant.

This budget also does not contain any "walking around money" or WAMs, that has been previously used for spontaneous and hidden pet projects. All line items are now accounted for, bringing additional transparency and openness to our state government.

This budget also contains tax relief for job-creators, including the reinstatement to phase out the Capital Stock and Franchise Tax, which is expected to provide more than 100,000 job creators more than $70 million in tax relief. That's $70 million that employers can use to hire more Pennsylvanians. This budget saves and expands key tax credits to encourage growth. The Job Creation Tax Credit and the Film Production Tax Credit are maintained, while the Research and Development Tax Credit is increased to $55 million.

Businesses may now write off 100 percent of the value of new equipment on their tax returns so that they can spend more money on business expansion and investment. This tax savings will translate into more jobs and a stronger economy.

The new budget also does not contain additional taxes or levies upon Pennsylvania job creators, including the Marcellus Shale gas industry. The Marcellus Shale gas industry already pays more than $1 billion in corporate income, sales, royalty and personal income taxes. All Marcellus Shale gas drilled in state land belongs to the people of the commonwealth, and the commonwealth receives hefty royalty fees when this gas is sold. These royalty fees far exceed the estimated revenue that any state-level tax would generate.

Despite the fact that our budget has been trimmed to deal with the fiscal mess created during the last eight years, Gov. Corbett and Republicans in the General Assembly have funded the core government services that Pennsylvanians depend on.

This budget fully funds emergency and public protection services, including $8.65 million for trauma centers, $3.78 million for burn centers, and $3.57 million for critical care hospitals. This budget also fully funds many of the necessary Veterans Affairs programs that serve our veterans.

The budget gives $10.5 billion to the Department of Public Welfare to provide support for our commonwealth's neediest citizens. Republicans have also supported Pennsylvania?s most vulnerable, by including $22 million dollars for Domestic Violence Prevention and $7 million for Rape Crisis services.

Republicans have restored basic education funding for all school districts to pre-stimulus (2008-2009) levels.

In 2008, the state budgeted $5.2 billion dollars for Basic Education. In 2009 and 2010, the state received federal stimulus money, in which Gov. Ed Rendell allocated towards basic education. He then decreased the amount of Pennsylvania tax dollars allocated for basic education funding, relying on the temporary stimulus to make up the difference. Districts were warned to use these funds for one-time expenditures, but unfortunately, some didn't, and worked in these funds into their annual operating budget.

There were no gimmicks this time. Gov. Corbett restored basic education funding to 2008 levels to put Pennsylvania schools back on the path towards sustainability.

There is also $100 million for Accountability Block Grants budgeted. Schools often use these to fund kindergarten programs.

Finally, this budget prevents school property tax increases beyond the rate inflation at the local level. This budget amended Act 1 -- the bill that governs school property taxes -- requiring voter approval for property tax increases above the rate of inflation.

Republicans have hit the reset button on Pennsylvania's finances, stopping the out-of-control and unsustainable spending that became commonplace over the past eight years. It's a good start, and now we have a governor and legislative majority who aren't afraid to set Pennsylvania on the right track.

Dwight D. Weidman is chairman of the Franklin County Republican Party

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