Safeguard Family Finances with the Taxpayer Protection Act

For Immediate Release
Commonwealth Foundation
Contact: 717-671-1901

Safeguard Family Finances with the Taxpayer Protection Act

Responsible Spending Boosts Job, Population, and Income Growth

February 23, 2015, HARRISBURG, Pa.—Gasoline taxes, severance taxes, personal income taxes, property taxes, cigarette taxes—no matter the decade, governor, or party in power, a proposal to raise a new tax to cover government spending is always just around the corner. As a result, since 1970, state government spending has risen nearly $14,000 per family of four, leaving residents facing the tenth-highest tax burden in the country to pay for it all.

Bills introduced today by Sens. Folmer and Bartolotta, called the Taxpayer Protection Act (TPA), would shield Pennsylvania’s working families from out-of-control spending growth that hinders job creation, promotes “brain drain,” and stymies personal income growth.

The TPA is just one of many crucial steps that would move us toward a balanced budget and put Pennsylvania back on the road to prosperity.

“Pennsylvanians have seen their state and local tax burden jump from 25th in the country to 10th in just over two decades,” commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. “This rapid rise in the cost of government has struck a severe blow to economic opportunity across the board. Pennsylvania ranks a depressing 49th in job growth, a dubious 48th in population growth, and a dismal 45th in personal income growth in that time.”

Benefield continued, “It’s no wonder that last year Pennsylvania was in the top 10 of states whose residents are leaving for states with friendlier tax climates, continuing a trend we’ve seen for decades.”

The TPA limits spending increases to the rate of inflation plus the state’s population growth, with surpluses going to the “Rainy Day Fund” and for tax reductions.

If the spending controls in the TPA had been in effect since 2003, taxpayers would have saved $28.7 billion over the past decade—or nearly $9,200 per family of four.

“Controlling spending does not mean cutting spending,” Benefield continued. “It simply limits the rate of spending growth to a responsible level and provides a financial cushion in case of hard economic times.”

State spending facts:

• For the seventh consecutive year, Pennsylvania will spend more from the General Fund than the state will collect in taxes.

• Federal stimulus funds, transfers from the “Rainy Day Fund,” and other one-time revenue sources have allowed lawmakers to spend beyond the state’s means for years.

• From 2002 to 2013, Pennsylvania state debt—including debt held by state agencies—more than doubled, from $23.7 billion to $50.4 billion.

• Today, Pennsylvanians owe $133.6 billion in combined state and local government debt, or a little more than $10,400 for every man, woman, and child.

Benefield continued:

“States with lower tax burdens and responsible rates of spending rank higher is job, income, and population growth—all areas where the commonwealth is sorely lacking. It’s time to protect Pennsylvanians’ ability to live, work, and prosper within the commonwealth with the Taxpayer Protection Act.”

Nathan Benefield is available for comment on the Taxpayer Protection Act. Please contact us at 717-671-1901 to schedule an interview.

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For more information, please contact our director of media relations for the Commonwealth Foundation at 717-671-1901 or media@commonwealthfoundation.org.

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