Real Government Reform From Rep. Schroder
Is the first step to managing Commonwealth fiscal health managing the finances of those who write the budget itself?
The economic news is going from bad to worse for the state Treasury and Pennsylvania taxpayers. Gov. Ed Rendell recently said he expects Pennsylvania’s budget deficit to exceed $2.3 billion by the end of this fiscal year and he has announced he intends to furlough as many as 2,000 state employees.
House Appropriations Committee Chairman Dwight Evans (D-Philadelphia) is projecting a deficit as high as $5 billion in two years. Evans recently blamed the deficit on lower than projected sales and income taxes, and the rush of newly unemployed citizens taking advantage of state-sponsored relief programs. He has hinted that a tax increase is forthcoming.
While it’s easy to pin the blame for Pennsylvania’s economic woes on the nation’s economic downturn, such is not the case. Ours is not a budget crisis. It is a spending crisis that no bailout is going to fix. In fact, recent budgets have routinely increased spending beyond the rate of inflation and relied on unrealistic revenue projections and one-time revenue sources.
From 2002-03 to the current 2008-09 budget, state spending increased by 38.6 percent while the rate of inflation rose by only 19.5 percent. Even before the state budget was passed in July, there were signs that revenues were not coming in according to Rendell administration projections. Several of my House Republican colleagues and I strenuously objected to spending increases and the expansion of programs supported by one-time revenues. At the same time, Senate analysts were warning of deficits reaching into the billions. Inflated revenue projections and the use of one-time revenue sources are a prescription for fiscal disaster. For these reasons, I voted against the current budget. Just weeks after the current budget passed, Pennsylvania was in a financial crisis.
For eight straight months, actual revenues have been well below the administration’s estimates. Clearly, the cause of the budget crisis pre-dates the economic downturn that began in October of 2008. Public corruption, fueled by greed, has also further eroded public confidence in elected leaders. We cannot allow this to continue and we cannot allow fiscal mismanagement to be used by the Rendell administration to foist a tax increase on Pennsylvania citizens.
We have reached a point in Pennsylvania where simple program cuts and layoffs will not be enough. We have talked about reforming state government for years. The time has come to take action. I am preparing to introduce several pieces of legislation, known as the Legislative Cost Reduction Package, to reduce the cost of governing the Commonwealth.
I have put together a package of bills that would cut salaries for members of the General Assembly and freeze staff salaries at 2008 levels. My plan would eliminate cost of living adjustments (COLAs) and state-paid health benefits for lawmakers, and would change the pension system for legislators to a defined contribution plan that will be structured to provide cost savings over the long term. I am also proposing a measure that would require surpluses in legislative leadership accounts to be returned annually to the state Treasury, and eliminating funding for discretionary grants, also known as WAMs.
Essentially, the concept behind my legislation is to return Pennsylvania to a part-time Legislature. Specifically, my legislation would save $12.8 million by reducing the base salaries of members of the Pennsylvania House and Senate from $78,315 annually to $30,000, and trimming the amount of additional compensation for those in leadership positions. Another $4.4 million would come from the elimination of state-paid health benefits for lawmakers.
Legislative surplus accounts, containing an estimated $200 million, would be surrendered to the state Treasury. An additional $3.5 million would be saved through a staff wage freeze, and savings ranging from $250 million to $600 million would come through the elimination of discretionary spending for local grants.
Our current economic crisis demands swift and sustained action, not a temporary fix. The legislation I am proposing would result in immediate and significant savings to the Commonwealth and its taxpayers, and the effect would be lasting. As legislators, it is imperative that we absorb the first cutbacks. Only then will we have the moral standing to make the kind of choices it will take to balance the next budget without increasing taxes. Increasing taxes during an economic downturn would only worsen an already difficult situation.
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Curt Schroder is the General Assembly Representative for District 155
Open Space Untouchable?
Recently it has been implied a prioritization of open space within the County’s overall priorities is beyond discussion. County Controller Val DiGiorgio disagrees, and said as much recently in response to an editorial in the press.
Open space is an important issue in Southeastern Pennsylvania, and we applaud DiGiorgio for bringing it up for discussion. The Pennsylvania Conservative Council plans on having an ongoing debate about how best to incentivize smart development. In the meantime, though, we hope our leaders do not become dogmatically attached to exactly how we handle it now.
Val’s guest column appears below:
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Recently, the Daily Local News printed an editorial about the county’s long-standing, bipartisan open-space plan. As part of the column, some of my recent comments, on how to conserve taxpayer dollars in a recession, were taken out of context.
Both as a private citizen active in numerous community organizations and as the county controller, I have supported the county’s open space program. In addition, both as a private citizen and as county controller, I have looked for ways to save taxpayers’ money — especially in this recession.
The question for serious public officials and citizens concerned about continuing our county’s high quality of life is: how do we balance our plans and needs with shrinking tax dollars?
As controller, it is my daily mission to protect and fight for Chester County taxpayers. During the budget hearings last year, I presented a comprehensive plan, listing a menu of options to the commissioners to avoid raising taxes in this time of economic crisis. Included among several options was my request to consider deferring a portion of the open-space program in calendar year 2009 only. My hope in presenting a menu of options to the commissioners was to spark an honest and open debate over the budget and to find cost savings in county government to minimize tax increases in a time when taxpayers are losing their jobs and homes.
I also hoped to increase taxpayer awareness on how much our government programs are costing our taxpayers. Open space, while important and worthy, is no exception. As controller, I have attempted to determine how much our $20 million per year commitment to this program has cost us in terms of debt service. For example, at current interest rates, each year of this program costs taxpayers up to an additional $1 million per year in additional interest on our bonds, even with our county’s top-of-the-line AAA bond rating. Taxpayers need to know what this initiative, and other programs, cost them each year.
During my many years of government service, I have rarely, if ever, seen a program that someone did not think was beyond examination. Unfortunately, leaders who suggest that we should not spend more than we can afford — in other words, that government must live within the means of the taxpayer — are unfairly characterized as mean-spirited and short-sighted. Every program is seen as vital to someone; yet, all need to be not only accountable, but also seen in the balance of what taxpayers can afford.
In these troubling economic times, every program (even one as worthy as open space) must be evaluated, examined and reviewed — every program. This is why my testimony and the Daily Local News’ editorial could be very beneficial, if it leads to a thoughtful, reasonable discussion without personal attacks.
I remain committed to the value of a sound open-space program. In addition, I will not shirk from duty as controller to be the fiscal watchdog for the county and, in the process, make our government more open, efficient and accountable. And, yes, I and my staff will continue to fight for taxpayers every day.
Valentino DiGiorgio, III is Chester County’s Controller
(Originally appeared in the Daily Local News.)