The $16 Billion Dollar Dump

Seemingly unnoticed in the new budget, is the incredibly giant leap in state spending on Public Welfare from $8.8B to $11.2B. This budget has obligated Pennsylvania taxpayers to permanently sustain a standard of living for welfare recipients that had been made 'temporarily' possible by one-time Federal stimulus dollars, and no one is batting an eye. It's a $2.4B increase in state spending, overnight. Just like that.

Last year, and the year before last, Pennsylvania received $2B per year in Federal stimulus grants for welfare, and $1.5B each year for K-12 Education. This year, with the Federal Government tightening its belt, Pennsylvania was not issued those previously enjoyed stimulus funds.

Governor Corbett's proposed budget created quite a stir when he allowed state spending on Education to return to pre-stimulus levels--even though he had executed exactly what was necessary and he encouraged school districts to do the same: operate within available means. Unfortunately, however, Governor Corbett did not apply the same principle he'd preached to the Education community when he laid out his proposal for spending on Public Welfare.

Last year, $25.2B was spent on Public Welfare in Pennsylvania, but most of that amount was funded by the Feds who gave roughly $16.4B. Pennsylvania taxpayers were obligated for the other $8.8 Billion. This year, however, rather than $16.4B from the Feds, Pennsylvania received only $14.4B because the Feds did not include the $2 Billion in stimulus funds as they had the previous two years. The lack of stimulus funds would have reduced spending on Public Welfare in Pennsylvania from $25.2B to $23.2B--that is if Governor Corbett had allowed spending to return to pre-stimulus levels as he did with Education, but he didn't. Instead, Governor Corbett made up for the lack of Federal stimulus dollars by allowing the PA taxpayer obligation to leap from $8.8B to $11.2B. That's a $2.4B spike. It's $2.4B added to the General Fund Budget. Without it, the General Fund budget would have come in at $24.7B rather than the $27.1 that passed on June 30.

To put the gravity of this $2.4B increase in perspective, it took former Governor Ed Rendell eight years to boost the taxpayer burden for Public Welfare by $2.4B. When Rendell took office, the taxpayer obligation to Public Welfare was $6.4 Billion. Eight years later, when he left, the taxpayer’s obligation had risen to $8.8 Billion. Governor Corbett and this Legislature have accomplished an increase of the same amount in less than one half of one year, of Corbett's first term. It's simply amazing.

Rather than return spending to the level that existed before the federal government’s one-time enticement, as he did with Education, when confronted with the choice, the Governor proposed to obligate the taxpayers to a gargantuan increase, for years and administrations to come--and the legislature voted to allow it.

With this budget now passed, as presented by the Governor, the taxpayers of the Commonwealth are now obligated to $2.4B in additional spending this year, next year, the year after and the year after that. Spread over Governor Corbett's four-year term, that's increased spending that adds up to more than $8B--and if Corbett secures a second term, the increase adds up to $16B assuming there is no increase. That’ll be $16 Billion not available for meeting known state debt. It's $16B Governor Corbett might have allowed us to keep in our pocket or put back into our businesses. It's $16B literally dumped on Pennsylvania taxpayers. Astounding.

PA 2010 State Budget Passes Senate and House: An Example of Spending Money that We Don’t Have

For the first time in his ‘reign’ as Governor, Ed Rendell has a budget that passed through the State House and Senate before the June 30th deadline. Congratulations Governor Rendell! Congratulations, too, to the 37 Senators and 177 Representatives that signed on to that “pile of garbage” that they called a State Budget.

Why is it a pile of garbage? . . . Because it is UNCONSTITUTIONAL

Our legislature is REQUIRED BY LAW to pass a balanced budget. The budget that passed the House and Senate yesterday is balanced on federal funds that don’t yet exist and a tax on the extraction of Marcellus Shale natural gas that has yet to be passed. In essence, “the budget stands for nothing” . . . which is appropriate since that is also the case with many of our legislators.

Who is to blame?

The opportunity to STOP the budget was in the Republican controlled Senate. The budget bill passed the State Senate by a vote of 37 to 13. There were only 13 Senators that did the right thing by voting NO to this example of fiscal irresponsibility. What about the Senate leadership? Here are their votes . . . for the record.

REPUBLICANS

YES - Joseph B. Scarnati III (President of the Senate)
YES - Dominic Pileggi (Majority Floor Leader)
YES - Michael Waugh (Majority Caucus Chair)
YES - Robert Robbins (Majority Caucus Secretary)
YES - Jake Corman (Majority Appropriations Committee Chair)
YES - Patrick M. Browne (Majority Caucus Administrator)
YES - Edwin Erickson (Majority Policy Committee Chair)

DEMOCRATS

YES - Roberta Mellow (Minority Floor Leader)
YES - Michael O’Pake (Minority Whip)
YES - Vincent Hughes (Minority Caucus Chair)
YES - Sean Logan (Minority Caucus Secretary)
YES - Jay Costa (Minority Appropriations Committee Chair)
YES - Christine Tartaglione (Minority Caucus Administrator)
YES - Richard Kasunic (Minority Policy Committee Chair)

THIS PROVES that the Senate leadership MUST change . . . one way or another!

The budget bill passed the State House by a vote of 117 to 84. This is not a shock seeing that the House is controlled by Rendell Democrats. What is shocking in this number, however, is that 16 Republicans voted WITH the Rendell Democrats in order to achieve a supermajority which was required to waive a rule requiring 24 hours’ notice before a bill is voted.

If you would like to see how your Senators and Representatives voted, please refer to the voting records below:

June 30 Budget Vote in Senate is HERE
June 30 Budget Vote in House is HERE

What about Northwest PA?

MOST of the legislators from our region in Northwest Pennsylvania agree with my views on the budget, and MOST of them voted against the budget bill yesterday. Specifically . . .

Mercer County Legislators

Representative Michele Brooks (R) - NO
Representative Dick Stevenson (R) - NO
Representative Mark Longietti (D) - YES
Senator Bob Robbins (R) – YES

Crawford County Legislators

Representative John Evans (R) – NO
Representative Brad Roae (R) – NO
Representative Michele Brooks (R) – NO
Senator Bob Robbins (R) – YES

Republican Representatives (and Conservatives) Michele Brooks, Dick Stevenson, John Evans, and Brad Roae all did the RIGHT thing and voted NO to the budget.

Rendell Democrats Bob Robbins and Representative Mark Longietti voted YES to the budget. Representative Mark Longietti did what his caucus told him to do . . . in the end he supported his Governor and his Caucus (right or wrong). Republican Senator Bob Robbins PROVED his allegiance to the Democrats that WROTE HIM IN in the Primary (all 800 of them) and he also supported his fellow Democrat Governor and his new Caucus.

As a Republican LEADER in the Senate, Bob Robbins should be ashamed of himself. Even more important, his CONSTITUENTS should be angry with him. It shows that he was more concerned with getting rid of the “budget problem” in an election year that he was with standing on principles of good government and fiscal responsibility.

In press releases that were sent out last night, Bob Robbins fellow legislators from this area made their thoughts about the budget clear . . .

Representative Michele Brooks stated:

“Although this budget was passed on time – as it should be – it falls short to earn my support. I have many serious concerns about funding allocations and the source of hundreds of millions of dollars in revenue.”

“Many of us have concerns regarding whether this budget is constitutionally balanced as it relies heavily on $850 million in funding from the federal government, which has not yet been approved by Congress and there are some doubts whether it will be approved. It also has a structural deficit of approximately $3 billion.”

Representative Brad Roae stated:

“State budgets are about priorities,” Roae said. “This budget sets the wrong priorities for Pennsyvlania.”

“This budget literally spends money the state doesn’t have,” Roae said. “This budget is based on the hope of a federal bailout for the state. If the federal government runs up the deficit to pay for this bailout, taxpayers will be paying for it for years to come.”

“This budget doesn’t reflect my priorities and it certainly doesn’t reflect the wishes
of the people I represent,” Roae said. “We needed to reduce spending due to the recession, but the cuts in this budget weren’t applied fairly. This budget sets up huge tax increases or painful spending cuts for next year. I simply could not support a budget that is this irresponsible.”

According to these statements, it seems to me that the conservative legislators that represent our area need help to fight for fiscal responsibility in Harrisburg . . . and they are not getting that from their own Senator. Hmmmmmm.

Where do I stand on the subject?

Anyone that voted FOR this budget made a conscious effort to pull the wool over the eyes of taxpayers. This is not a VALID budget . . . no matter how you look at it.

It is the responsibility of our legislators to make certain that the state government does not spend beyond its means. If we don’t have the money, we ought not to be spending it. Federal dollars that simply aren’t there should not be considered in the calculations, and tax revenues from Marcellus Shale should NOT be considered in the equations either. IF the tax on Marcellus Shale extraction is pushed through (in October), it will be the worst fiscal decision in Pennsylvania . . . ever!

If I were the Senator in Pennsylvania’s 50th District, I would have voted NO to yesterday’s budget. I would have continued to vote NO until the budget was actually balanced on REAL numbers. More importantly, I would have been pushing for these changes back in February and March . . . when budget negotiations SHOULD have been taking place. Waiting until the 11th hour so that they can push through the equivalent of a legislative joke is shameful.

I usually sign off by stating "as alway, just my opinion". Today it is important that I sign off by stating the following:

This is not just my opinion. It is my official statement.

Roberta Biros
Editor, Mercer County Conservatives

Spend, Spend, Spend: PA Budget Passed in the House

Written by Roberta Biros

Governor Rendell is in a hurry to pass a budget before the June 30th deadline (for the first time in his career as Governor I might add). That is a GOOD THING.

Unfortunately, the piece of garbage that passed the House today is a mess. I don’t usually allow legislators to put words in my mouth, but in this case I’ll make an exception. I’d like to quote Representative Michele Brooks (R-17th District), whose official email announcement stated that “this spending plan is a fiscal train wreck”.

Wow! I wish I had written it myself! In a way, I guess I just did. It was absolute plagiarism . . . plain and simple but I digress. Regardless of WHO said it first . . .

Calling the budget a "fiscal train wreck" is some strikingly straight talk from a Harrisburg insider. In response, I say “It’s about time”.

I received numerous email messages from Pennsylvania legislators today. Each one explained that the idea of passing a budget quickly (and well before the deadline) is a great idea. Every legislator hopes to have a budget passed before the end of June this year . . . especially those legislators that have opponents in the General Election. However, the obvious fiscal irresponsibility of House Bill 2279 is poor policy. We can all tiptoe around the fiscal quagmire that IS the Commonwealth of Pennsylvania, but all of the icing in the world can’t sweeten this poison pill that they call a State budget.

Here are a few excerpts from the legislator email messages that were received in my “In Box”:

Representative Dick Stevenson (R-8th)

“At a time when state revenues have not yet rebounded, Pennsylvania needs to look to other states and follow their lead to reduce spending, not increase the state budget by $1.2 billion or 4 percent,” said Stevenson, a member of the House Appropriations Committee. “Neighboring states like Maryland, New Jersey and New York have all taken steps to decrease expenses. They face the same financial obstacles we do, but they realize their taxpayers cannot afford a penny more in increased taxes and fees.”

Representative Brad Roae (R-6th)

“I voted ‘no’ because there is too much spending in the budget bill. Spending has increased by more than $8 billion since Governor Ed Rendell took office. We cannot afford to spend more than a billion dollars more than last year’s budget.

Representative Karen Boback (R-117th)

“I am greatly concerned about the overall spending number of this budget. The 2009-10 budget used all of Pennsylvania’s reserve accounts, and we are facing another deficit at the end of the year. To increase spending by $1.2 billion, which is 4 percent growth, is not wise. We should continue to look for ways to allocate our resources prudently, and we should remain cognizant that federal stimulus funds we have received for the past two years will soon run out. This is just not the time to increase state spending. “

Representative Sam Rohrer (R-128th)

“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.”

Representative William Adolf (R-165th)

“While I am pleased to see us debating the budget this early in the process, I believe the spending plan that was passed today is taking us in the wrong direction,” Adolph said. “This budget spends far more than we can afford, and it sets us up for some major financial problems in the near future.”

Representative Michele Brooks (R-17th)

“I agree that government should be listening to the people it serves and address the numerous calls to live within its means. This spending plan is a fiscal train wreck that does not reflect the priorities of the people who are paying the bills and who have told us government must operate more efficiently and effectively.

In Closing . . .

HERE is a link to the budget document, and HERE is a link to the House Vote (which ended at 107 to 89 . . . pretty much along party lines).

My father used a saying when I was a kid. I never had a purpose for it until today. He would say “You can’t make a silk purse out of a sows ear”. I find that analogy to be perfect in this situation. House Bill 2279 is a sows ear. It will be the job of the State Senate to transform it into a silk purse before June 30th.

Unfortunately, my faith in the ability of the Senate to bend and twist this sows ear into something attractive is limited. Our State Senators are concerned about having their names tethered to another delayed budget. That concern will make them hold their nose and vote FOR this “train wreck” with hopes of not drawing attention to themselves. They are crossing their fingers, closing their eyes, and praying for this election year to blow over without incident.

Time will soon tell.

Pennsylvania Tax Revenues Falling Short Of What State Lawmakers Projected

THE KEYSTONE COPS BUDGET SAGA CONTINUES!!!!!!

Pennsylvania is on course for another fiscal train wreck this year according to the latest Department Of Revenue figures. Last year Governor Ed Rendell and state legislative leaders in both the House and Senate were not able to pass a budget until the end of October. Even then the budget that was passed was packed full of projected revenue numbers and voodoo mathematics. Just imagine how this year's budget negotiations are going to play out with these figures.

From The Department Of Revenue Press Release:

Acting Secretary of Revenue C. Daniel Hassell today reported 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.

Click Here To Read More

I just don't understand how our state lawmakers don't do something to cut spending when they know state tax revenues are coming int 2.8 percent below estimates. Commonsense tells you not to just set back and do nothing. That isn't leadership. Neither is Governor Ed Rendell's budget proposal that wants to once again increase state government spending. Again where does the madness stop?

Pennsylvania Lawmakers Don't Want 'Real' Reform

In today's editorial the Harrisburg Patriot-News asks whether or not state lawmakers have the "courage" to push for real reform by cutting state spending. I had to chuckle after reading the editorial. I couldn't help but think to myself just how much legislative leaders in Harrisburg actually hate reform.

For years state lawmakers were allowed to pass expensive legislation and increase state spending without much oversight or accountability. They voted themselves lavish pension increases, illegal pay raises, and bloated budgets that has put us in our current fiscal mess. And the lack of accountability by the voters has resulted in Pennsylvania having one of the largest, most expensive, and most corrupt state legislature's in the country.

How large is our state government? The following is a passage from the article that pretty much sums up the situation.

With 253 seats, our Legislature is the second largest in the United States, but that doesn’t tell the real story. The largest is New Hampshire; its 424 citizen-legislators are paid $200 for a two-year term.

One can only dream.

By contrast, Keystone lawmakers are the second-highest paid in the nation, according to the Pennsylvania Economy League. And California, with the highest salaries, has 120 seats for nearly three times our population.

Click Here To Read More

Pennsylvania voters and good government advocacy groups continue to put tremendous pressure on state lawmakers to reform state government and stop the wasteful spending. A great example of this occurred in July 2005 when state lawmakers got too greedy and passed a middle of the night pay raise that would have raise some legislators salaries by 30%. The outrage by voters ended up forcing legislative leaders to repeal the pay raise four months later.

Although the pay raise repeal was a success, I think Pennsylvania voters need to ask themselves this election year what really has changed since the repeal of the pay raise in Harrisburg? Most efforts to reform state government have been basically ignored by legislative leaders.

The state budget has continued to increase more than the rate of inflation at a time when working Pennsylvanians are struggling to keep their jobs and pay household bills. The current "bonusgate" corruption trial has brought to the forefront how legislative leader's in both parties used the power of their offices for personal and political gain.

The real truth is that most state lawmakers don't want reform in Harrisburg. State lawmakers love things just the way they are. They like the per diems and perks paid for on public dime. They like the lavish pensions they will receive when they retire. They like that Pennsylvania taxpayers pay for their health care plans with no personal out of pocket cost to them.

It's funny that most state lawmakers even after the repeal of the pay raise still believed they deserved it. So I asked this question to the Patriot-News Editorial Board, do you really think our current state lawmakers want "real reform"? It's not a question of courage when the entire legislative process is controlled by greed.

PA Teacher Pensions Out Of Control

Guest Column Submitted By Ed Inghrim

Recently New Jersey Gov. Chris Christie announced a freeze on spending and said pensions and benefits are the major driver of spending increases at all levels of government. He cited two examples of retired public employees. A 49-year-old retiree, who paid $124,000 toward retirement pension and health benefits, will get $3.3 million in pension payments and nearly $500,000 for health care benefits -- $3.8 million on a $120,000 investment. A retired teacher who paid $62,000 toward her pension and nothing for full family medical, dental and vision coverage, will collect $1.4 million in pension and $215,000 in health care benefit premiums over her lifetime.

I decided to check his math using the Saucon Valley School District teacher contract as a model. I assumed a teacher hired at age 24 at $40,000 would work 30 years and get an average pay increase of 4 percent a year (quite conservative) and contribute 7.5 percent of salary to the state retirement system. Retiring at 54, the teacher's total pension contribution would be $168,255. Assuming the teacher lived to 85 and got health benefits until Medicare eligible, he or she would collect about $3.4 million after retiring. Not a bad return. If the annual raise were 5 percent, the teacher would get a return of $4.2 million on an investment of $199,317.

Like New Jersey, Pennsylvania faces out-of-control spending and a seriously underfunded public pension system. Unfortunately, our elected representatives committed their taxing authority to correct any bad decisions they or the pension fund managers made to guarantee benefits. Perhaps Gov. Ed Rendell and our legislators should get a copy of Christie's budget speech and read it.

Ed Inghrim is the Director of Saucon Valley School Board in Lower Saucon Township

Rendell Leaves Behind A Fiscal Mess

Look up the word "chutzpah" in the dictionary and you’ll find a picture of Gov. Ed Rendell next to it. Chutzpah, which means "unmitigated gall, audacity or nerve," is the perfect description of Rendell, who has run up massive deficits during his two terms as governor and now is warning his fellow Pennsylvanians that we have to deal with the fiscal crisis.

In this case, "we" means you and I — the beleaguered taxpayers of Pennsylvania — not Rendell, who will leave the governor's mansion after eight years of fiscal mismanagement to collect a huge taxpayer pension as his reward for screwing up the state’s finances.

It was classic Ed Rendell Tuesday as the governor delivered his eighth — and thank God, his final — budget to the Pennsylvania Legislature. Having run out of things to tax, Rendell proposed expanding the state sales tax to cover more items. Rendell and his lockstep Democrats in the Legislature have repeatedly opposed expansion of the sales tax to cover services when it was attached to a plan to eliminate property taxes. That's what Republican state Rep. Sam Rohrer has been pushing for years.

But now that Rendell has run out of opportunities to raise other taxes, he needs the expanded sales tax to fund his proposed $29 billion spending plan — and pay for years of deficit spending.

Despite running up huge deficits in the past two budgets, Rendell wants to increase state spending by another $1.1 billion for the 2010-11 fiscal year, which begins July 1. The first rule of holes is when you're in one, stop digging. Rendell plans to dig so deep that the next governor will never get out from the fiscal abyss "Fast Eddie" has created.

Rendell wants to pay for the new spending by using $1.1 billion in federal stimulus funds, which may or may not be approved by Congress. (Just imagine what will happen to "stimulus" handouts when Republicans take back control of Congress in November.)

And Rendell is leaving with a final "up yours" to the taxpayers of Pennsylvania. Having presided over a massive expansion of state spending over the past eight years — $9 billion and counting — Rendell warned lawmakers that Pennsylvania is facing a "fiscal tsunami" — a potential $5.6 billion deficit from the 2011 expiration of federal stimulus money and the ticking time bomb of public pension obligations.

For eight years, Rendell has ignored the growing pension crisis, which will result in massive property tax increases for Pennsylvania residents in 2012. That wallop will come after the 2011 deregulation of electricity rates, which will raise most residential bills by at least 30 percent.

You can't spend what you don't have, but Rendell and most legislators flunked Economics 101. Rendell, with the Legislature in tow, has been spending money the state doesn't have for years. The chickens will come home to roost. Unfortunately for Pennsylvania taxpayers, Rendell will have flown the coop.

Rendell wants to reduce the state sales tax rate from 6 percent to 4 percent, but expand it to more than 70 services currently exempt (lawyer and accountant fees, dry cleaning, for example) and items such as firewood, candy, gum, bottled water, magazines and personal hygiene products. (Groceries, clothing and prescription drugs would remain exempt from the sales tax under Rendell's plan).

Rep. Rohrer has proposed a similar plan, but it would lead to the elimination of the state's onerous school property taxes. Most taxpayers, especially senior citizens on fixed incomes, would come out ahead under Rohrer's plan. Rendell simply wants more money from taxpayers to cover his deficit spending.

The state finished with a $3.25 billion deficit for the 2008-09 fiscal year, which led to a 101-day budget impasse over Rendell's 2009-10 spending plan. And what did Rendell and the most expensive legislature in the country come up with for the current fiscal year? A budget that was in the red from Day 1. The state is looking at a minimum $500 million deficit for the 2009-10 fiscal year.

In addition to expanding the sales tax, Rendell wants to extend the tobacco tax to include cigars and smokeless tobacco products and enact a new severance tax on natural gas extraction. Both proposals were rejected by the Legislature last year.

Will any of these taxes pass? Rendell is prohibited by the state constitution from seeking a third term as governor. He's a lame duck. He can propose all the tax hikes he wants, but the Legislature will have the final say. All 203 members of the state House and half of the 50 members in the state Senate face the voters in 2010. How many of them are going to vote for one of the largest tax increases in Pennsylvania history?

Pennsylvania voters are already in a foul mood. A recent Franklin & Marshall College poll found only 16 percent of registered voters say the Legislature is doing a good job. How much lower will that number go if the Legislature goes along with Rendell's tax hikes? How many lawmakers will sacrifice their careers for Ed Rendell?

Tony Phyrillas writes about politics for The Mercury in Pottstown, Pa. Check out his daily blog here. You can also e-mail him at tphyrillas@gmail.com