Economy Stalls While Government Grows

This week, lawmakers and the Wolf Administration were unable to agree on a revenue package to pay for a $32 billion budget proposal. Once again, state government is operating with an unbalanced and illegal budget.

Higher taxes are at the heart of the debate. Republicans have reportedly offered Gov. Wolf a plan to balance the budget without tax increases. But the governor remains steadfast in his commitment to shrink families’ budget with unfair and counterproductive tax hikes.

The laser-like focus on revenue—even by Republicans in the General Assembly—is a distraction from the larger problem besetting the state: exorbitant spending growth.

Government spending grew faster than the commonwealth’s economy in 2015-16. This isn’t an anomaly, but representative of a four and a half -decade trend. All indicators are the trend will remain in fiscal year 2016-17 and 2017-18.

The enormous transfer of wealth from the private sector to the state has undoubtedly held back job and income growth in the state. Combine high taxes with our unfriendly business climate and it is no wonder 45,000 residents fled Pennsylvania last year, contributing to the first net population lost in 31 years.

And many of the proposals coming out of the capitol—whether it be higher energy taxes or more borrowing—are more of the same policies that created perpetual budget crises and economic stagnation.

Moving Pennsylvania forward requires pro-growth policies—like tax reform, eliminating corporate welfare, welfare reform, privatization, and school choice. These and other significant reforms can help put the state’s finances back together while improving the lives of people looking to make Pennsylvania a place where they build a career and raise a family.