Proposed Budget Should Hold Line on Spending, Borrowing

(HARRISBURG) – Facing a national downturn in the economy, Sen. Jake Corman (R-34) said Pennsylvania should craft a state budget that holds the line on spending and borrowing, provides fair funding to all areas of the state and does not increase state taxes

Governor Ed Rendell today proposed a 2008-09 state budget calling for a $1.1 billion increase in General Fund spending to a total of $28.3 billion, while cutting millions of dollars in programs that are important to all Pennsylvanians, which includes significant new borrowing and new taxes for large new programs.

Rendell is proposing to tap the Rainy Day Fund, use significant funds from the Motor Vehicle Fund to cover debt service, impose a new surtax on insurance companies that write flood insurance policies in Pennsylvania, and redirect money from Pennsylvania’s Tobacco Settlement Fund.

“At a time when the economy is very volatile, I have serious concerns about spending more, borrowing more and dipping into surpluses that may not be there six months from now,” Corman said. “This is not the time to be pushing for far-reaching and expensive new programs that taxpayers will have to fund – now and in the future.”

Corman also took the governor to task for cutting programs that are crucial to rural areas and the agriculture industry, while ensuring that Philadelphia receives a lion’s share of new funding for education and new police officers.

“As the former mayor of Philadelphia, the Governor’s new education funding formula funnels a large portion to the city, while shortchanging other areas of the state,” Corman said. “Philadelphia has 17% of the state’s students but will get 30% of the new funding,”

Corman said that he has concerns that Governor Rendell wants to spend $900 million in new money for initiatives under his proposed “Protect our Progress” package – including programs that will be extremely costly for job creators. “While state spending has increased dramatically under the Rendell Administration, the citizens of the Commonwealth have been unable to keep pace,” Corman said. “In fact, Pennsylvania’s median household income has increased by only 1.3 percent since the year 2000 and only 101,900 new jobs have been created in the Commonwealth since January 2001.”

“Rather than putting a greater burden on our job creators, we should be looking for ways to keep our economy moving forward and encourage innovation,” he said. “I do support the governor’s proposal to continue and expand economic stimulus projects, like Keystone Opportunity Zones, that the legislature approved several years ago. Because of these successful and effective programs, Pennsylvania is far better shape economically than many of our neighbors, so it makes sense to build on that progress.”

Corman said the Senate Appropriations Committee, which he serves on, will be carefully examining the proposed budget during two weeks of public hearings in Harrisburg beginning in early March. A final state budget must be adopted by the June 30 constitutional deadline.

CONTACT:
Don Houser
Phone: 717 787-1377
Email: dhouser@pasen.gov