State Budget Growth Dashes Past Pa. Economy
The National Association of State Budget Officers has reported a gaping incongruity between Pennsylvania's modest economic growth and its more significant budgetary growth over the past few years.
Pennsylvania's economy expanded by roughly 20 percent from 1997 to 2006, but the organization reported a state budgetary growth of about half during that span. Gov. Ed Rendell has proposed a budget for the coming fiscal year totaling $28.3 billion that would yet again increase commonwealth spending at a rate outpacing inflation. Mr. Rendell argues it is a 4.2 percent increase, but critics have said the actual increase is 5.7 percent and that the governor's figure relies on excluding certain figures such as supplemental appropriations.
State Sens. Mike Folmer (R-Lebanon) and Bob Regola (R-Westmoreland) have proposed a measure to limit spending growth to inflation plus population growth. Both have criticized the governor's proposed Fiscal Year 2008-09 budget for exceeding that base figure (3.29 percent).
Mr. Rendell touts the projected $430 million surplus that would result from enacting his budget. Economic conservatives have criticized the governor for excessive spending, but he notes that under his oversight since 2003, the state has added almost 190,000 jobs and that unemployment is below the national average.
Opponents like the nonprofit Commonwealth Foundation note that simple employment figures don't complete the picture of the state's economic health. Pennsylvania ranked 38th in the nation in job growth, 40th in personal income expansion and 42nd in population increase in the years 2002 to 2007.
The foundation has suggested that government spending has impeded economic growth in Pennsylvania by making taxes more difficult to reduce. Republicans in the General Assembly have proposed reductions in the personal income tax, but opponents of such a cut like House Majority Leader Bill DeWeese (D-Greene) argue it is unnecessary because at a 3.07 percent flat rate the levy is lower here than in most states. Pennsylvania is uncommon, however, in that it taxes both sales and income.
In May 2005, Susquehanna Polling and Research reported that the state's voting public strongly favors binding restrictions on government spending. Fifty-five percent of residents said they would be "more likely" to support a candidate who embraces spending limits while only 7 percent believed they'd be "less likely." The poll found that 75 percent of Republicans supported the limits, while 64 percent of Democrats and 59 percent of independents did.
Source: The Bulletin.