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State governments don’t need more revenue. They need a reality check and Pennsylvania needs this reality check more than any state right now.

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Pennsylvania’s Reality Check

For the past two years, states have repeated the same fire drill: increasing spending while increasing taxes and threatening program cuts. Yes, the country experienced an economic slowdown and mild recession in 2001. But the recession is over; it has been for two years. Not only has the U.S. Department of Commerce recently reported record revenue collections by state and local governments for 2002 ($872 billion in 2002), Americans just received the good news that the nation’s GDP grew by 7.2% in the third quarter of this year (the highest growth rate in almost 20 years).

State governments don’t need more revenue. They need a reality check and Pennsylvania needs this reality check more than any state right now.

Last week, members of the Pennsylvania House of Representatives voted 104-95 to temporarily raise the state’s income tax by 16% and then lower it next summer for an overall 11% increase.

What is most frustrating about this $1.1 billion tax-and-spend package is that the revenue from the tax increase isn’t just going to fix the state’s spending shortfall, it will fund new spending programs. Even more disturbing is that this statewide tax increase is only the tip of the iceberg. The House also approved a bill that will allow local school districts to ask voter permission to increase local income tax rates as well. Talk about passing the buck.

States like Pennsylvania which are milking the economic slowdown argument appear to be hell-bent on milking taxpayers until the cash cow runs dry. The states that raised taxes during the previous recession suffered the lowest economic growth in the country while states that restrained spending prospered with tremendous economic recovery and growth.

The affirmative votes of the 104 members of the Pennsylvania House only highlight the yearning of these tax-and-spend politicians to gouge the wallets of over-burdened taxpayers. Legislators claim that spending on superfluous projects has already been cut. Are they telling the truth?

We question how tightly these tax-happy legislators and Governor Rendell fastened their fiscal belts. But instead of asking the legislators themselves, we sought out the answer on our own. Here’s a glimpse of just how constrained the enemies of the taxpayer are in Harrisburg. This list, compiled from a number of articles that appeared in local papers in just the past two months, is certainly not complete. However, we did identify over $218 million in supposed essential spending:

• $27 million in state and local money to a private, outdoor recreation company to build a $54 million outdoor recreation superstore. The worst insult from this taxpayer-funded venture capital? The store’s local competitors are being forced to fund their competitor with their own tax dollars.

• $5.2 million for a new high school indoor swimming pool.

• $1.1 million for a high school stadium renovation to include a two-story press box, elevator, two ticket booths and new, theatre-style seating.

• $18 million for a new high school stadium and a three-field athletic complex including an eight-lane artificial surface track (the school doesn’t have a track team).

• $7.4 million for construction cost overruns for Route 222 road improvements. The overruns will be paid out of funds allotted for future improvement projects on Route 145 and the Route 33 and 512 interchange.

• $16,000 for four Pennsylvania Turnpike officials (and some spouses) to attend a conference in Paris, France. In September 2003, these four officials (and spouses) attended the 71st annual meeting of the International Bridge, Tunnel and Turnpike Association. Cost of a night’s stay at the hotel? $300. Registration for the meeting? $800 per person. Total cost of trip is only an estimation provided by Turnpike officials. If you have driven down the PA Turnpike in the past year or so, you have been subjected to psychedelic billboard signs telling motorists that "Rome wasn’t built in a day." This billboard attempts to allay local motorists’ frustration from the seemingly never-ending transportation project. However, someone should tell the four turnpike officials (and their spouses) that the Romans didn’t hang out in Paris either.

• $541,000 for a truck driving school.

• $148 million spent by the Department of Environmental Protection in the form of "awards" to various organizations involved in watershed restoration projects (i.e., dam removals, abandoned mine reclamation, wetlands restoration, stream improvements, riparian buffer plantings and watershed group startups).

• $60,000 in grants awarded by The Fish and Boat Commission to groups that raise and stock fish for the "public."

• $120,760 salary for a former school board superintendent who resigned from the position. The former superintendent, still receiving his salary, is the current director of the transition team and special projects. His resignation followed a miscalculated budget shortfall.

• $5.3 million spent in the last 20 months on artifacts for a proposed Wild West Museum. Um, last time we checked, Pennsylvania was not part of the Wild West.

• $5 million pending grant waiting to be awarded to the group that owns a local, unfinished stadium. Construction on the stadium began in 1991 and has been left untouched and incomplete since 1999. The grant will be awarded when construction is complete. The owner? A mental health service organization that receives 98% of its funding from... the government.

• $1 million request regarding the same stadium. However, this request comes from the township that wants to tear down the unfinished structure.

• $40,000 for 85 new garbage cans in a particular city.

• $5 million requested by the City of Pittsburgh to build a scenic trail and river landing along the Monongahela River. The city recently announced it is bankrupt and its bond rating has been lowered to just above "junk" status by Wall Street. Legislators are contemplating a state bailout package for the city.

We urge our friends in Pennsylvania to use this information the next time your legislator comes knocking at your door, asking for your vote. Ask him or her why you had to forgo your hard-earned money in lieu of pet projects and pork spending. Ask him for a trip to France or wherever there may be a convention that piques your interests.

The Senate has yet to vote on the House’s version of the bill and has indicated that the House’s tax increase is too big. While that is a start, we encourage you to tell your Senators that any tax increase is too big. Tax dollars are not to be treated like a bet on a crap shoot. However, someone forgot to tell that to the folks in Harrisburg.

[Posted October 31, 2003]

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