Saturday, August 30, 2014
Inquirer Daily News

Rigid ideology won't solve state budget crisis

I tend to admire politicians who stick to their principals, but the state budget impasse in Harrisburg shows the danger of clinging to closely to ideology, no matter the circumstances. Republicans are threatening the well-being of all Pennsylvanians by refusing to consider raising taxes to fill the $3.2 billion deficit in the state budget.

Rigid ideology won't solve state budget crisis

I tend to admire politicians who stick to their principals, but the state budget impasse in Harrisburg shows the danger of clinging to closely to ideology, no matter the circumstances. Republicans are threatening the well-being of all Pennsylvanians by refusing to consider raising taxes to fill the $3.2 billion deficit in the state budget.  

The worst economic crisis since the Great Depression has wrecked havoc with government finances across the country. Consumers are spending less, investment is down, and companies are laying off workers by the thousands. That means less tax revenue to fund government programs-- like education, workforce training, and unemployment benefits-- that only become more important as the economy deteriorates. 

The sheer speed and depth of the recession has caught even the most experienced elected officials off guard. In Pennsylvania, Gov. Ed Rendell first predicted the budget deficit would only reach $1.6 billion. A few months later, he was forced to change that estimate to $2.3 billion. Now, the total hole appears to be closer to $3.2 billion.

At first, Gov. Rendell proposed dealing with the deficit by simply cutting spending. As the hole grew, it became clear that only a broad-based tax increase would generate enough revenue to deal with the shortfall. He proposed increasing the Personal Income Tax by half a percentage point, from 3.07 percent to 3.57 percent.  

There was just one problem: Republicans in control of the State Senate said no. GOP lawmakers not only refused to increase the Personal Income Tax, they made clear their opposition to ALL tax increases. Instead, the Senate Republicans put forth a proposal that would drastically slash state spending. Almost every state service would be severely impacted and some would be completely eliminated.  

This is the wrong approach. Many of the programs that would be effected are aimed at helping people hurt by the recession. For example,  the budget for state's emergency mortgage assistance program would be reduced by nearly 40 percent. At a time when foreclosure rates are reaching record levels, does it really make sense to cut the program? The same can be said for education, healthcare, economic development and dozens of other important services.  

Still, GOP lawmakers are adamant that raising taxes is the wrong approach. In some ways, this shouldn't be surprising. Opposition to tax increases is the centerpiece of Republican ideology. However, we're in the middle of an unprecedented economic crisis. Shouldn't elected officials be willing to reconsider their preconceived notions? 

After all,  the Republican obsession with deregulation at the Federal level was a major cause of the current recession. We have eight years of a president who prioritized cutting taxes over funding services at the federal level. Clearly, that approach didn't work.  

It would be more understandable if Republicans were using their proposal as a starting point. Gov. Rendell calls for a tax increase, the GOP calls for huge spending cuts, and then both sides meet somewhere in the middle. Instead, it seems like Republicans are completely unwilling to negotiate. Instead, they are clinging to ideology at a time when we need flexibility. 

 

About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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