Budget Standoff a Clash Between Conflicting Tax Philosophies

Senator Lisa Baker (20th District) issued the following Op-Ed to newspapers across the state regarding the budget standoff:

Some important points seem to be lost in the debate over Pennsylvania’s budget standoff.  The General Assembly approved, before the constitutional deadline, a state budget that would have been the largest in our history.  It was not a surprise that Governor Wolf was dissatisfied with it, but there are ways to resolve such differences without plunging our state into a full-fledged budget crisis.

The decision to veto the entire state budget not only departed from the practice of Republican and Democrat governors over the past forty years, but it also closed the path to putting a partial budget in place that would alleviate concerns for many individuals who depend on state services and the organizations who help to provide them.  To many, it looks as if leverage enhancement won out over disruption avoidance in the administration’s calculation.

In contrast to previous budget standoffs, this one is much more a clash between conflicting philosophies on taxes than it is a reflection of partisan politics.  We are not mindlessly blocking the governor’s agenda; we are purposefully opposing the big tax increases he wants to impose on families and employers.  Taxpayers largely want to see the line held on taxes with an emphasis put on squeezing better performance out of current spending.  On the other side, a formidable array of advocacy groups see the advent of an administration committed to expanding state government as the best chance to boost state spending and to recoup from four years of conservative budgetmaking.

Governor Wolf is insisting on substantial increases in state spending and state taxes.  In fact, his recommended spending increase is nearly as large as the one contained in the economically devastating tax-and-spend package that settled the infamous 1991 budget crisis.  It took many years to dig out from that disaster.  And, at $4.5 billion, his tax increases are twice that of all other states combined.

Some have sympathy for his spending goals, but they oppose the taxes he wants in order to pay for that spending.  And history has proven it doubtful that a sudden infusion of funding will be spent effectively and efficiently.  It is easy to fault legislators during a budget crisis, and this administration is doing so even more aggressively than its predecessors.  But they have failed to convince taxpayers that their plan is sustainable and necessary, a point underscored by the balanced budget we passed.

The fixation on a severance tax is misplaced and misleading, not unlike the promise that gambling would eliminate property taxes.  The governor’s proposal is structured in a way that will subtract from development and jobs, and it will only pay a portion of his spending plans.  People who support a severance tax as a means of avoiding general tax increases will be disappointed by the income and sales tax jumps that will hit nearly everyone.  The proposal also overlooks the substantial impact fee implemented to provide community and environmental protections.

On the flip side, taxpayers strongly support pension reform and liquor privatization.  Yet, Governor Wolf vetoed reasonable plans to accomplish each.  It is left to the commentators to analyze how much his supporters’ strident opposition to these measures played into his decision.

As the discussions move forward, there is a structural deficit that needs to be addressed.  But the solution cannot simply be higher taxes and more spending.  Reform, of the pension problem first and foremost, is essential for the long-term fiscal and economic health of Pennsylvania.

There is a half-story circulating about legislative session.  In actuality, the Senate is on 6-hour call.  That means the moment an agreement is reached on the state budget or any of the key pieces attached to it, we promptly reconvene to vote on the bills.  It can happen any week, and any day of the week, for that matter.  Unfortunately, no one can say when the big gap between the views on spending and taxes will be successfully bridged, or when the governor will realize his spending and tax hopes are too much for taxpayers.

Andrew M. Seder
(570) 226-5960

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