Posts Tagged finances

Best of Times, Worst of Times


“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness . . . ”  So begins Charles Dickens’s novel A Tale of Two Cities.  It is set in in the years prior to the French revolution, but actually applies to the recent performance of Republicans in the Pennsylvania legislature.

As official Harrisburg prepares for what is shaping up to be another epic budget battle, the big question is: which GOP will show up in 2017?  Will it be the Republican-controlled legislature that last year stood its ground and fought Governor Tom Wolf’s historic tax and spending proposals, or will it be the GOP that this year folded like a cheap suit and approved $1.4 billion in new spending?

The $1.4 billion spending hike might not qualify as the worst of times, but coming on the heels of a successful struggle against the Wolf Administration’s spending demands it did leave a lot of folks puzzled.  After winning the longest budget fight in state history, why turn around and cave in months later? This leaves most observers – and quite a few participants – at a loss when it comes to predicting how the 2017 budget war will unfold.

We are certain of a few things.

The toxic stew of tax increases and new taxes cooked up to pay for this year’s massive spending increase has failed to live up to expectations.  To date, revenue collections for the 2017-2018 fiscal year are running $261.8 million below estimates.  This, coupled with a “structural budget deficit” pegged at over a billion dollars means the new budget will begin with a significant gap between spending and revenue.

We also can be sure that Governor Wolf will again demand massive spending increases and the taxes to pay for that spending.  He used his budget address this year to lecture the General Assembly for its refusal to accede to his spending demands.  Since most of his priorities have not been funded chances are they will be dusted off and included in his new budget proposal.

But should Republicans sit back and wait for the governor to set the agenda?  Leo Knepper of the Citizens Alliance of Pennsylvania, a pro-growth PAC, suggests a different course of action.  “If Republicans in the General Assembly were smart, they would upend a long-standing budget tradition and go on offense,” Knepper wrote in a recent policy brief.  “(They) should ignore tradition and pre-empt the Governor’s budget address with a plan of their own.”  Knepper observed this would “force the governor to play defense rather than the usual offensive position granted to governors.”

The question remains, however, whether or not legislative Republicans – or at least the leaders who actually sit at the negotiating table – want to go on offense.  Will the resolute leaders who fought and won the first budget battle show up to play, or the ones who forfeited this year’s game?

The final certainty is that all this will play out against the backdrop of the rapidly approaching 2018 election for Governor.  For his part, Governor Wolf will want to deliver the goods of higher spending to his largely urban constituency.

It won’t be so simple for Republicans.

With a number of legislators, including leaders who will negotiate the new budget, eyeing a race for the Republican gubernatorial nomination, the upcoming budget battle is fraught with peril.  There are pressures for leaders to “be responsible” and give into spending demands.  But with a veto proof Senate majority and a historically large majority in the House, voters are not likely to be either understanding or forgiving if the GOP doesn’t stand firm.

Will it be the “best of times” with legislative Republicans going on offense and standing up to a tax and spend governor, or will it be the “worst of times” with the taxpayers of Penn’s Woods getting stuck with yet another round of tax hikes?  As the budget process begins a new cycle it is impossible to tell which of the GOP’s split personalities will emerge dominant in 2017, but both the pocketbooks of taxpayers and the political fortunes of many politicians will be affected by the outcome.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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This Week on Lincoln Radio Journal: Sen. Scott Wagner Talks State Spending Cuts


Radio Program Schedule for the week of January 23, 2016 – January 29, 2016

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from PAIndependent.com
  • Lowman Henry has a Newsmaker interview with State Senator Scott Wagner (R-York County) about ways to cut state spending
  • Joe Geiger of the First Nonprofit Foundation has Emily Skopov of No Crayon Left Behind in the Community Benefit Spotlight
  • Beth Anne Mumford of Americans for Prosperity-PA has a Lincoln Radio Journal commentary on National School Choice Week

This week on American Radio Journal:

  • Lowman Henry talks with Jim Phillips of the Heritage Foundation about implications of the Iran nuclear accord
  • Doug Sachtleben of the Club for Growth has the Real Story on the Iowa Caucuses
  • Eric Boehm and Ken Ward have a Watchdog Radio Report on sky high property taxes in Texas
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on the latest developments in the Clinton e-mail server scandal

Visit the program websites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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This Week on Lincoln Radio Journal: State Spending During Budget Impasse


Radio Program Schedule for the week of December 12, 2015 – December 18, 2015

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from PAIndependent.com
  • Lowman Henry has a Newsmaker interview with State Representative Chris Dush co-author of a Report on State Spending During the Budget Impasse
  • Eric Montarti and Frank Gamrat have an Allegheny Institute Report on demise of the proposed severance tax on Marcellus shale drillers
  • Beth Anne Mumford has a guide to dealing with that progressive who comes home for the holidays

This week on American Radio Journal:

  • Lowman Henry talks with Veronique de Rugy from the Mercatus Center at George Mason University about abolishing the U.S. Department of Agriculture
  • Doug Sachtleben of the Club for Growth has the Real Story on the federal budget stalemate
  • Eric Boehm and Matt Kittle have a Watchdog Radio Report on a Wisconsin prosecutor run afoul of campaign finance laws
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on President Obama’s ISIS speech

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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Harrisburg, We Have a Spending Problem


Pennsylvania state government has a structural budget deficit of $1.2 billion dollars.  This somewhat mystical figure is agreed upon by just about everyone.  Given this rare point of agreement, why then is the ongoing budget impasse focused on spending increases rather than spending cuts?

When the working families of Penn’s Woods sit down to pay their monthly bills and income is less than expenses then the family cuts back on spending.  That is because ordinary people can’t just walk into the boss’s office and say “I don’t have enough money to pay my bills so you will pay me more next month.”  And certainly, faced with a deficit, working families – and even most businesses – don’t go out and spend more.

But, that is exactly what Governor Wolf is proposing.  He wants a $4.7 billion increase in state taxes.  If you accept that there is a $1.2 billion structural deficit, then he also wants to increase spending by $3.5 billion.  It is an unrealistic proposal and the reason why the state budget impasse has dragged on for five months.

The governor, however, has won on this front: Republican counter-proposals have focused not on spending cuts, but on increasing spending by less.  Given everyone has bought into the structural deficit number the goal should be to reduce spending to bring actual income and expenditures into balance.  That is what happens in the real world.

Government, however, does not live in the real world.  At no point has a budget been put forward that would even slow the growth of state government let alone cut spending.  The battle has been all about how much bigger state government will become, not about living within our means.

Driving this irrational approach to budgeting is spending on K-12 public education.  The biggest lie since “if you like your health insurance you can keep your health insurance” is that Governor Tom Corbett took a meat axe to education spending.  A cabal of Democratic politicians, labor unions and their media apologists perpetrated that lie during last year’s gubernatorial campaign even though actual spend numbers prove state tax dollars spent on public education increased to record levels under the former governor.

Governor Wolf has never shifted out of campaign mode, and in an effort to repay the unions who financially backed his campaign has made historic increases in education spending a key demand.  Education is a motherhood and apple pie issue.  After all, who doesn’t want our children to have the best education possible?  We all do.  The rub is little of the increases in spending actually benefit children, going instead to pay for bloated administrative bureaucracies and skyrocketing pension expenses.

To their credit, legislative Republicans are insisting on structural reforms to the state’s pension system before agreeing to any spending increase.  But, they have accepted without as much as a whimper the governor’s premise that spending must go up.  Wolf is already crowing that he has gotten Republicans to agree to a “historic” (meaning massively large) increase in state spending on education.

Yet even today, as the budget that should have been done before Independence Day fireworks remains unresolved as we shop for Thanksgiving dinner, not one single party to the budget debate has put on the table any serious menu of potential spending cuts.  Even the GOP’s on-time, no tax hike budget which the governor vetoed included significant spending hikes.  No effort was made to cut spending to match projected income.

There is an old saying in sports that you can’t win by simply playing defense.  That is what has happened as the budget game goes into triple overtime.  At no point has there been an offense designed to cut spending, just defense over spending increases.  So the taxpayers of Pennsylvania have already lost the game, the only hope now is that the final score is not too lopsided.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

 

Permission to reprint is granted provided author and affiliation are cited.

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This Week on Lincoln Radio Journal: PA Budget Impasse Update


Radio Program Schedule for the week of August 29, 2015 – September 4, 2015

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from PAIndependent.com
  • David Taylor of the PA Manufacturers Association is joined for a Capitol Watch discussion on the latest developments in the state budget crisis by Neal Lesher from the National Federation of Independent Business-PA and by Nathan Benefield of the Commonwealth Foundation
  • Lowman Henry has a Town Hall Commentary on the rise of Donald Trump

This week on American Radio Journal:

  • Lowman Henry talks with Jim Phillips of the Heritage Foundation about the proposed nuclear deal with Iran
  • Doug Sachtleben of the Club for Growth has the Real Story on style over substance in the presidential campaign
  • Eric Boehm gets details from Jonathan Wood of the Pacific Legal Center on the EPA gone rogue on this week’s Watchdog Radio Report
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on the suddenly competitive race for the Democratic Presidential nomination

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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This Week on Lincoln Radio Journal: PA Budget Update


Radio Program Schedule for the week of July 18, 2015 – July 24, 2015

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from PAIndependent.com
  • Kevin Shivers from the National Federation of Independent Business-PA and Matthew Brouillette of the Commonwealth Foundation are joined by State Representative Seth Grove (R-York) for a Capitol Watch update on the budget stalemate
  • Lowman Henry has a Town Hall Commentary on why what works in Washington doesn’t work in Harrisburg

This week on American Radio Journal:

  • Lowman Henry talks with Keith Naughton of the Daily Caller about the U.S. normalizing relations with Cuba
  • Andy Roth of the Club for Growth has the Real Story on the record of Wisconsin Governor Scott Walker
  • Eric Boehm and Evan Grossman have a Watchdog Radio Report on the American Federation of Teachers endorsement of Hillary Clinton
  • Colin Hanna has an American Radio Journal commentary on the conflict between same sex marriage rights and religious rights

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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This Week on Lincoln Radio Journal: Tom Wolf…Promise V Performance


Radio Program Schedule for the week of May 23, 2015 – May 29, 2015

This week on Lincoln Radio Journal:

  • David Taylor hosts a Capitol Watch roundtable discussion on Governor Tom Wolf: campaign promise vs. performance in office with Matthew Brouillette of the Commonwealth Foundation and Neal Lesher from the PA Chapter of the National Federation of Independent Business
  • Lowman Henry has a Town Hall Commentary on the state’s business leaders rejecting Governor Wolf’s tax plans

This week on American Radio Journal:

  • Lowman Henry talks with Stanley Renshon of the Center for Immigration Studies about stopping President Obama’s executive orders on illegal immigration
  • Andy Roth of the Club for Growth has the Real Story on key 2016 U.S. Senate races
  • Eric Boehm and Mark Lagerkvist have a Watchdog Radio Report on New Jersey Governor Chris Christie’s lavish spending at NFL football games
  • Dr. Paul Kengor from the Center for Vision & Values at Grove City College has an American Radio Journal Commentary on seven brothers from one family who fought in World War II

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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