Government Debt

The 2016-17 General Fund budget added to Pennsylvania’s fiscal challenges. Lawmakers approved the $31.6 billion budget without implementing meaningful reforms or authorizing enough revenue to balance the budget. Despite lacking solid revenue sources, the legislature increased spending by $1.6 billion—a sum vastly exceeding the combined growth rate of inflation and population.

Yesterday’s Independent Fiscal Office (IFO) mid-year report warned Pennsylvania could face a $900 million budget shortfall this year alone. By 2022, this deficit could reach $3 billion per year.

The enacted $29 billion General Fund budget (a 1.88 percent increase over 2013-2014) and $71.4 billion total operating budget represent Pennsylvania’s highest spending levels ever—exceeding years when federal stimulus dollars were used to balance the budget.

Over the past six fiscal years, the commonwealth has spent more than it has taken in. This fiscal gap is projected to widen as expenditures are on pace to grow faster than future revenue. Such a structural deficit poses a threat to the very foundations of economic growth and job creation that lead to prosperity for Pennsylvania’s taxpayers.

Know that feeling a month after Christmas when the credit card statement shows you blew your holiday budget? Imagine the pain you’d experience after six consecutive years of spending beyond your means. That’s the situation facing our state government—unless the commonwealth resolves to end the spending binge and tighten its budget belt a notch or two.

Governor Corbett's proposed budget of $28.4 billion in general fund spending and $67.6 billion in spending from all funds represents our highest spending levels ever—exceeding years when federal stimulus dollars inflated total spending. This budget, however, still reflects a reduction from 2010-11 spending levels when adjusting for inflation.

Believe it or not, local governments, i.e., taxpayers, own 49 golf courses in Pennsylvania. One of the poorest performers is Dauphin Highlands Golf Course, owned by Dauphin County taxpayers, which simply doesn't make enough money to cover the interest on its debt. For years, the Dauphin County General Authority has been caddying for the course's bills to the tune of more than $3 million. The golf course is for sale, but because its $11 million debt load exceeds its market value it has become

Today, Pennsylvanians owe $121 billion in state and local government debt. This equates to more than $9,400 for every person, and almost $38,000 for the average family of four in the commonwealth.

A four-alarm fire is engulfing Pennsylvania's economy. If we don't regain control of the state debt, corrections costs, public welfare growth and government employee pensions, our state taxpayers will be burned, and Pennsylvania's children will inherit only the ashes of our once great commonwealth.

The FY 2011-12 total operating budget of $63.4 billion, which included $27.1 billion in General Fund spending, represented the first year-to-year reduction in state spending in at least 40 years. However, as the economy continues to struggle out of a recession and with increasing costs in public welfare, corrections, pensions, and debt, the FY 2012-13 budget will require even more difficult decisions by the General Assembly and Governor Corbett to put Pennsylvania on a path to prosperity.