House Budget Represents a Step Towards Fiscal Stewardship

House Republicans committed to changing Pennsylvania yesterday. The caucus released its proposed 2017-18 budget, which stands in stark contrast to Gov. Wolf’s tax-and-spend proposals. The House Appropriations Committee has already advanced the budget to the full House, where it is expected to receive a vote today.

In a blog post last year, we expressed disappointment with both the final budget and the process leading up to its passage. The House’s latest plan does not pose a concern on either of these fronts. In fact, taxpayers should be encouraged about the course this budget is setting. Lawmakers have not only established a new standard of transparency by offering a budget proposal in April, but they have also embraced the idea of reinventing or redesigning government to help secure financial stability for working people.

Here’s how:

1. No tax increases. The proposal would not add to the state’s crushing tax burden. According to PennLive, lawmakers are considering various options to raise new revenue, including gambling legalization and partial liquor privatization. One-time revenue shifts are also a possibility. While not an optimal solution, such shifts represent a palatable alternative to tax hikes.
    
2. Spending restraint. The budget keeps spending within the Taxpayer Protection Act (TPA) index and justifiably so. The state faces a massive deficit this year—with spending exceeding revenue by upwards of $800 million. When you spend more than you have, the obvious solution is to restrain spending growth. By holding the line on spending, the House budget seeks to protect the personal budgets of families across the commonwealth.
    
3. Corporate welfare reductions. Lawmakers have embraced the idea that government should not be in the business of picking winners and losers. Overall, corporate welfare spending would decline by more than $56 million. This does not include corporate welfare spending outside of the General Fund, which may also be reduced as a budget moves closer to final passage.

Republican leaders have acknowledged that this budget represents only a starting point for negotiations. The bill will head to the Senate, where it is likely to be amended. That’s the nature of the legislative process.

However, the changes should reflect the core principles that now serve as a foundation for the House budget. Namely:

• Protect Pennsylvanians from higher taxes.
• Control spending growth, keeping it within the TPA index so government doesn't grow faster than families' ability to pay. 
• Adopt structural reforms, including liquor privatization, pension reform, and substantive restructuring of corrections spending and human services programs, to avoid tax hikes now and in the future. 
• Ensure all revenue to cover authorized spending is in place and is not based on optimistic assumptions. This will avoid any possibility of operating at a deficit for a second consecutive fiscal year.

If these principles are adhered to, and if lawmakers continue to embrace innovation in state government, Pennsylvania’s fiscal and economic health will improve.