January 11, 2017 Print

Rather than raise taxes to cover budget shortfalls, the Pennsylvania state government has indicated that it plans to streamline government programs and cut wasteful spending. The Commonwealth Foundation, an Atlas Network partner based in Harrisburg, is stepping up to the challenge of presenting the government with prudent and practical budget solutions with its December policy brief, “Embracing Innovation in State Government,” and a series of individual proposals that the organization is posting to its blog throughout January.

“Over the last five decades, state spending has risen by more than $4,000 per person—an inflation-adjusted increase of 189 percent,” wrote Bob Dick, senior policy analyst for the Commonwealth Foundation, in his “Embracing Innovation in State Government” study. “In 1970, the state spent $2,122 for every Pennsylvanian. Today, that number is $6,132. Predictably, this spending binge has hurt the commonwealth’s financial position. The Mercatus Center ranks Pennsylvania 46th in cash solvency, which is defined as a state’s ability to pay its short-term bills on time. Mercatus also gives the state a poor budget solvency ranking—42nd overall. This category measures the gap between a state’s revenues and expenses for the fiscal year.”

The study recommends several cost-saving measures that can achieve results in both short- and longer-term windows. The short-term budget recommendations include ending special subsidies like tax credits, grants, and loans; and reducing spending in the more than 150 special funds that fall outside the state’s General Fund.

Longer-term recommendations include privatizing the state-run liquor system, expanding educational choice, reforming the structure of the welfare system to encourage self-sufficiency, reducing the state’s incarceration rate, utilizing public-private partnerships for state park management, adopting a sustainable model for public employee health care, and reviewing government administration practices.

“Pennsylvania’s regular budget deficits, rapid spending growth, and lackluster economic performance stem from state government operating on auto-pilot instead of actively reforming broken programs,” Dick concluded. “Tackling the underlying causes of our budget problems, while embracing innovative efforts to streamline government, will strengthen Pennsylvania’s communities and make the commonwealth a better place to live and work for everyone.”

In a Jan. 6 blog entry, Dick calls for a government efficiency review that could save Pennsylvania $1.5–$1.9 billion, and notes that the state recently adopted a hiring freeze for government employees, just as the Commonwealth Foundation recommended in October.