PA Budget Presentation

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    Fireproofing

    PennsylvaniasEconomy:

    ennsy van a a e u ge

    ByNathanBenefield

    CommonwealthFoundation

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    ThomasJefferson:

    Thenaturalprogressofthingsisforlibertyto

    JamesMadison:

    Ibelieve

    there

    are

    more

    instances

    of

    the

    abridgementoffreedomofthepeopleby

    radualandsilentencroachmentsb thosein

    powerthan

    by

    violent

    and

    sudden

    usur ations.

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    th

    localtax

    burden,

    up

    from

    24th in

    1991

    Pennsylvaniataxpayers

    pay

    $4,190

    per

    capita

    instatean oca taxes,10.1 o t eirincome

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    st

    13.2%,vs.

    23.3%

    Nationally

    46

    th

    in

    Population

    Growth. ,vs. . a ona y

    48 inPersonal

    Income

    Growth

    122%,vs.158%Nationally

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    PAlost

    anet

    77,184

    taxpayers

    to

    other

    states

    Netlossof$4.3billioninincome

    in2011.

    rs

    me

    n

    years

    wasno

    op

    ou oun

    state

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    TotalOperating

    Budget:

    $64.9billion(firstcutin40

    ears

    IncludesMotorLicenseFund(highways),LotteryFund,

    UnemploymentCompensation

    Fund,

    Federal

    Funds

    to

    state

    CapitalBudget(notincludedinoperatingbudget):

    .

    Independentstateagencies(notincludedin

    , , .

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    ReducedspendinginK12Educationprimarilydue

    to osso st mu us un ng spen ng romstatetax

    dollarsactuallyincreases)

    m on ess ns a e s mu usa

    Totalpublicschoolspendingdoubledfrom1995to

    , .

    Reductionof20to30%foruniversities:PennState,

    Pitt Tem le Lincoln andStateS stem

    NoNewTaxes

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    FromFY200203to20112012,GeneralFund

    spen ng ncrease y . on,or .

    K12Education,PublicWelfare,Corrections,and

    reasury e aymen s represen o enera

    Fund.

    .

    K12Education,PublicWelfare,Corrections,andTreasur rewb $7.6billion.

    Restof

    budget

    cut

    by

    $426

    million

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    Includessome

    other

    fundsMotor

    License

    Fund

    and

    Lotter Fundwhicharea ro riatedeach ear

    ratherthanbyformula

    Non referreda ro riation

    bills

    PartofGeneralFund,butnotdepartmentsofstate

    Exam lesPennState,Pitt,PAPublicUtilities

    Commission

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    Taxcredits,

    transfers

    between

    funds,

    dedicates

    taxes

    to

    specificfunds

    TaxCode

    Anytax

    increase/cut

    CapitalBudget

    Twobillsonetoauthorizeborrowing/bondissues,the

    secon

    o

    em zecap a

    pro ec s

    e g e

    or

    un ng

    Legislationtochangeprogramsdoneinseparatebills

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    201112passedbudgetspends$578millionmore

    t anexpecte revenue

    ShortfallthroughJanuaryof$497million

    IndependentFiscalOfficeOutlook:

    GeneralFundrevenuegrowthtoaverage1.6%annuallyfor

    .

    FourAlarmFire:

    Correctionss endin to row6.9% er earfrom201114.

    Debtpayments

    will

    grow

    by

    7.3%

    per

    year

    from

    2011

    14.

    PublicWelfarespendingtogoupby8%peryearfrom201114.

    Commonwealthpensioncontributionswillskyrocketby40%

    peryear

    over

    the

    next

    three

    years.

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    hasexploded

    by

    more

    than

    500%

    since

    1980.

    prisonpopulationis13%overprisoncapacity.

    Threenew

    prisons

    and

    additional

    facilities

    are

    scheduledforconstruction,bondedat$695

    million.

    Overthelast30years,theCorrectionsbudget

    ItisnowthethirdlargestofallstateagenciesinGFbudget.

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    Pennsylvania State & Local Government DebtDebtor Debt Outstanding Per PersonTotal State $45,020,310,000 $3,621

    State $10,356,710,000 $833

    tate genc es ut or t es , , , ,

    Total Local $75,759,706,000 $6,094School Districts $26,618,928,378 $2,141

    , , , ,

    Total $120, 780, 016,000 $9, 715Pennsylvania State, State Agencies & Authorities Debt

    Debtor Debt Outstanding 2002 Debt Outstanding 2011 Increase ChangeState $6,805,184,000 $10,356,710,000 $3,551,526,000 52%

    State Agencies & Authorities $16,848,800,000 $34,663,600,000 $17,814,800,000 106%

    Total State $23,653,984,000 $45,020,310,000 $21,366,326,000 90%

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    Welfarespending

    grew

    threetimesfasterthanrest

    ofbud etfrom200203

    DespiteSpending,PovertyRateContinuestoClimb

    to12.2%

    in

    2011

    Represents39%ofGeneralFund,43%ofTotal

    OperatingBudget

    MedicalAssistance

    is

    biggest

    MaintenanceofEffort federalmandatein

    StimulusandinAffordableCareAct:Statescant

    reduceMedicaid

    enrollment

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    andPSERS

    contributionstorisefrom$500millionin2010to$6

    billionin

    2015

    Causes2001pensionbenefitsincreaseand2002COLA

    200102

    and

    2008

    09

    investment

    losses

    (currently

    assume7.5to8%annualreturn)

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    FiveFactsAboutCorbettsBudget

    Proposal

    nd

    $27.14billion

    GF,

    $63.3

    billion

    operating.

    Debtandpensionpaymentsincrease

    .morethan$500million.

    Correctionsislevelfunded

    Beginspathtoreform.

    Welfare s endin basicall flat

    ButincreaseinMedicalAssistance,largestprogramand

    biggestthreat.

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    NextStep:

    Spending

    Caps

    Limitgrowthofspendingtoinflation+population

    orces awma ers oprac ce scarestraint

    orrec ons:

    re orms

    a

    re uce

    spending&crime

    MedicaidReform

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    Redefineprevailing

    wage

    laws

    that

    inflate

    the

    Eliminate

    debt

    for

    corporate

    welfare SchoolChoice

    EducationalImprovementTaxCredit,charterschools,

    vouc ers,

    an

    omesc oo ng

    cos

    muc

    ess SchoolChoiceimproveseducationaloutcomessavingon

    futurecorrectionsandwelfarespending

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    CommonwealthFoundation

    7176711901

    [email protected]

    Facebook.com/CommonwealthFoundation