“More money, more problems.” It seems that Pennsylvania lawmakers and The Notorious B.I.G. may have found some common ground. Surplus revenues have been a hot topic since the Independent Fiscal Office (IFO) announced the government should expect to end this fiscal year with $866 million more than originally anticipated. Lawmakers in Harrisburg are already debating whether these funds should be saved, used to cut taxes, or spent. Ways to spend such as $125 million for school repairs are already under way.
However, what’s always missing from the conversation are long-term solutions.
The TPA, introduced as House Bill 1316 and Senate Bill 116, would constrain out-of-control spending and make both savings and investments a viable option moving forward. The TPA works by tying spending growth to the rate of inflation and population growth. Currently, there are no caps on state spending and the commonwealth regularly spends more than it takes in.
Graph: State Spending vs. Taxpayer Protection Act
Tax reform in conjunction with the TPA would free up spending while fueling economic growth and investments in areas like schools. It’s no secret that federal tax reform is a primary driver of this year’s robust revenue collections, and that growth is projected to continue. The IFO estimates next year’s revenues will grow by $994 million.
Enacting the TPA and tax reform would ensure Pennsylvania lawmakers continue debating how to best invest surplus funds, instead of scrambling to cover deficits and shortfalls. Perhaps we need to revise The Notorious B.I.G.'s original quote, "more money, better problems."
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