Real Government Reform From Rep. Schroder

Real Government Reform From Rep. Schroder

Published: Feb 23, 2009 at 10:13 am

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.

Curt Schroder is the General Assembly Representative for District 155