Overspending Problems from Greece to Harrisburg, PA

May 6, 2010

We’ve written about overspending problems in Greece, Spain, and of course, our own federal government.  Yet we’ve also warned that budget problems aren’t limited to countries: states and even local government’s across the country are also experiencing significant budget shortfalls that they are struggling to address.

Pennsylvania provides another example of a government in trouble. The state government faces a projected shortfall for this fiscal year of $1.1 billion. That’s the new estimate that was released this week. It’s $400 billion more than the estimate released March 31st, just over a month ago. Pennsylvania citizens might appropriately wonder how much worse the next set of numbers will be!

In addition to this significant shortfall, the state is also struggling to find funds for highway and transportation repairs, including more than 5,000 bridges which have been deemed structurally deficient.  Just yesterday, Pennsylvania’s Governor Rendell urged the legislature to come up with at least $472 million a year to invest in fixing the transportation system. Gov. Rendell had numerous suggestions for how to raise the money for transportation, and just about all of them involved collecting more money from the public: higher gas taxes (Pennsylvania already has the 13th highest gas tax in the nation), adding tolls to highways, imposing a fee on motor-vehicles, and myriad other taxes and revenue raisers.

Yet Pennsylvania lawmakers would better serve their constituents by focusing on cutting the state budget rather than once again raising taxes.  A good, hard look would find that there is plenty of room to cut.  After all, the enacted general fund budget in 2000-01 was for just $19.9 billion.   That’s more than $9 billion less than Gov. Rendell’s $29 billion proposed budget for 2010-11. The Rendell administrations 2010-11 budget represents a 46 percent increase in state government spending in ten years.  Cutting just 12 percent of that new spending would put the budget back into balance.

As we’ve pointed out, public opinion polls show that Americans already feel over-taxed. They want government to tighten its belt, instead of continuously trying to squeeze more and more out of taxpayers.  Pennsylvania legislators should step up and start making tough choices about how to reduce government spending.  It’s good policy for the state, and likely will end up being good politics too.

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3 Responses to Overspending Problems from Greece to Harrisburg, PA

  1. Lee says:

    I liked the article until I got to the point of comparison between 2000-2001 budget numbers and the 2010-2011 proposal. I don’t see that as being a relevant comparison. Not much of what you were able to do in 2000 is able to be done in 2010 for the same amount of money. I believe the bigger issue is the inflated budget projections. Tax revenues have actually been increasing year to year, but the continual increase in spending is creating the shortfall. While I agree the administration needs to cut spending, I also believe that a healthy amount of revenues are necessary.

  2. Lee says:

    I liked the article until I got to the point of comparison between 2000-2001 budget numbers and the 2010-2011 proposal. I don’t see that as being a relevant comparison. Not much of what you were able to do in 2000 is able to be done in 2010 for the same amount of money. I believe the bigger issue is the inflated budget projections. Tax revenues have actually been increasing year to year, but the continual increase in spending is creating the shortfall. While I agree the administration needs to cut spending, I also believe that a healthy amount of revenues are necessary.

  3. Lee says:

    I liked the article until I got to the point of comparison between 2000-2001 budget numbers and the 2010-2011 proposal. I don’t see that as being a relevant comparison. Not much of what you were able to do in 2000 is able to be done in 2010 for the same amount of money. I believe the bigger issue is the inflated budget projections. Tax revenues have actually been increasing year to year, but the continual increase in spending is creating the shortfall. While I agree the administration needs to cut spending, I also believe that a healthy amount of revenues are necessary.

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