DN editorial: 'Reinventing' government likely to hit us all in the wallet

IF A POLITICIAN says he or she wants to "reinvent government," it might be a good idea for taxpayers and those who rely on government services to run away and hide.

If the past is any guide, this reinvention will mean cuts in services and, as important, a shifting of the tax burden down the ladder from the federal to state government and from the state down to local government.

As a taxpayer, you might see your federal tax bill go down, only to have local property taxes go up.

Even if it froze spending, the state still faces a budget deficit estimated at $500 million this year and $1.7 billion next year.

There is no constituency in the Legislature for increasing the state's sales tax or the personal income tax - even Gov. Wolf has given up on pushing those ideas. So, Republicans are into "reinventing," as House Majority leader Dave Reed put it recently.

In Washington, the Trump administration is already taking apart Obamacare and has talked about shifting Medicaid from an entitlement program into block grants that would go directly to the states. Both moves will have a major impact if they come to pass.

As part of Obamacare, the Wolf administration accepted $350 million offered by the federal government and used it to extend Medicaid to thousands of poor people. With the demise of Obamacare, that money could disappear - leaving the state holding the bag on the costs. If Pennsylvania has to make up for that $350 million, it will be added on to the state's already substantial deficit.

As to the Medicaid block grant idea, the good news is that it would give state governments more flexibility in how the money is spent. The bad news is that if costs rise - because of increased medical costs and enrollment - the state is on the hook.

These are new variations on an old ploy. We saw a version of it a few years ago when then-Gov. Tom Corbett slashed state funding for public schools. The move saved state government a bundle, but most school districts cut services and increased taxes. Corbett didn't ease the burden of paying for public education; he redistributed it.

At their convention this week in Harrisburg, county commissioners from around the state were fretting about what the future holds. In Pennsylvania, counties are responsible for human services - the array of programs that serve the elderly, the poor and the disabled. Most of that money comes from the state and federal governments.

No one is sure what will emerge from Washington and Harrisburg this year, but local officials fear they will be left holding the bag if these government entities retreat from funding. And county governments are ill-equipped to pick up the slack because they rely exclusively on property taxes to fund their operations. (Philadelphia, which is both a city and a county, relies on a broader range of taxes.)

Nearly 82 percent of the state's $31.5 million budget goes to only three departments: Education, Human Services and Corrections. And most of that money go to individuals - including students, the elderly, the poor, the mentally ill and disabled – as well as the state's 49,000 inmates.

So, you can rethink or reinvent government all you want. It can save money at the margins. But it will also mean cuts in services to the people government is supposed to serve. That is the reality we may face this year.