State Budget and Taxes

Budget Should Concern Parents and Property Taxpayers

I have an op-ed in today's Morning Call of Allentown responding to Governor Corbett's budget proposal. It takes a close look at severe cuts to public schools and support for Penn State and other colleges and universities proposed by the Governor:

If you have children or pay property taxes in Pennsylvania, Gov. Corbett's budget proposal should trouble you. His budget cuts public school aid by a billion dollars, setting funding back three years. Support for Penn State and other colleges and universities is cut in half.

Governor Corbett Unveils 2011-12 Budget Proposal (Updated)

Governor Tom Corbett unveiled a $27.3 billion spending plan for the 2011-12 Fiscal Year. His proposed budget would reduce 2010-11 spending by $866 million, or 3.1%, and cut 1,550 public employee positions.

The Pennsylvania Budget and Policy Center has a full analysis of the Governor's budget proposal and funding levels by department and for specific education, health care and other line items.

You can also read PBPC's media statement on the budget plan.

In Case You Missed It: Third and State Blog This Week

This week on Third and State, we blogged about the upcoming state budget, the end of adultBasic, a questionable business climate ranking, and much more!

In case you missed it:

  • On the state budget and the economy, Sharon Ward shared a podcast featuring her and Jan Jarrett of PennFuture discussing the state budget principles that will create jobs and ensure the long-term economic success of the Commonwealth. Mike Wood, meanwhile, challenged comments made this week by Budget Secretary Charles Zogby that Pennsylvania's budget woes are due to overspending. Mike points out that nearly every state in the nation — low-spending and high-spending alike — is facing a budget shortfall this year thanks to a recession-driven decline in revenue collections.
  • On the economy, Mark Price blogged about the problems with a new business climate ranking from the U.S. Chamber of Commerce that seems to favor states with lower wages and less human development. Mark also shared a funny but informative video of the Daily Show’s Jon Stewart discussing pay on Wall Street and for teachers. 
  • On health care, Chris Lilienthal highlighted a New York Times story on the end of Pennsylvania's adultBasic health insurance program this week and what that means for the more than 41,000 Pennsylvanians who lost their coverage.
  • Finally, on jobs and wages, Stephen Herzenberg noted that The Economist agrees with the Keystone Research Center on one thing: people don’t take government jobs to get rich.

More blog posts next week. Keep us bookmarked and join the conversation!

Friday Podcast: Principles for a Better State Budget

Next week, Governor Corbett will unveil his first state budget. It will outline a spending plan for the next fiscal year, but really it sets a course for the Commonwealth's economy and priorities for years to come.

So it is critical that the Governor and Legislature take a forward-looking approach to this budget with a focus on job creation and long-term economic success.

The Pennsylvania Budget and Policy Center and PennFuture teamed up to produce a new report setting forth key budget principles to promote a more prosperous Pennsylvania.

Do Texas, Mississippi and Indiana Have 'Spending Problems'?

Pennsylvania's new Budget Secretary Charles Zogby trotted out a familiar line at the Pennsylvania Press Club luncheon on Monday when he proclaimed that Pennsylvania "doesn't have a revenue problem, it has a spending problem."

Might Secretary Zogby be reading the wrong side of the ledger? Or do Republican Governors Haley Barbour of Mississippi, Mitch Daniels of Indiana, and Rick Perry of Texas (to name just a few) have spending problems too? After all, each of those states is facing budget woes in the wake of the Great Recession.

Actually, nearly every state in the nation is facing budget woes this year thanks to a recession-driven decline in revenue collections. So it is a revenue problem.

Maybe the Mayans Were Right, the World Is Ending Soon ...

Prominent Arkansas Republican, two-time gubernatorial candidate, and former gas company executive Sheffield Nelson would like to increase his state's natural gas drilling tax.

Arkansas currently levies a 5% natural gas extraction tax, but it offers a discounted rate of 1.5% for the first three years (when about 40% of a well’s production takes place). On top of that, the state also allows a number of deductions in determining the taxable amount. Both of these “allowances” cut into collections pretty severely.

Citing these loopholes, Nelson is proposing a 7% flat rate, with no exemptions. He says the current tax does not fairly compensate Arkansas for the gas being extracted.

Like We Said, Policymakers Are Focusing on the Wrong Deficit

New York Times economist David Leonhardt makes two simple points in today’s paper that we made in our release last week underscoring the need for more action to create jobs.

First, output in the United States has rebounded thanks to the Recovery Act, surpassing its level before the recession. The Act, according to our estimates, saved 400,000 jobs in Pennsylvania alone.

In Case You Missed It: Third and State Blog This Week

This week. we blogged about the upcoming two-year anniversary of the Recovery Act, President Obama's budget plan, a few hundred Valentine's Day messages for Governor Corbett, sales tax loopholes that only Amazon.com could love, and much more!

In case you missed it:

  • On the state budget, Michael Wood detailed Amazon's foot-stomping response to efforts by states to close a sales tax loophole that gives the online retailer an unfair competitive edge over other retailers. (Spoiler alert: The brick-and-mortar stores are none too happy about it!) Mike also shined some light on Pennsylvania's "conservative" debt levels and explained that Pennsylvania's debt service payments have long been low — between 3% and 4% of the state budget.
  • On health care, Chris Lilienthal shared some of the Valentines that Governor Corbett received this week from Pennsylvanians asking him to have a heart and save adultBasic.
  • On the federal budget, Chris highlighted some analysis from the Center on Budget and Policy Priorities on President Obama's budget proposal for the 2012 Fiscal Year. Mark Price, meanwhile, shared a video clip of Columbia University Professor Jeffrey Sachs discussing the federal budget and noting that both parties have the wrong priorities by cutting services vital to working- and middle-class families.
  • Finally, on the economy, Mark Price takes note of the upcoming two-year anniversary of the passage of the American Recovery and Reinvestment Act. Mark also blogged that policymakers are focused on the wrong deficit — Main Street America is a lot more concerned about a deficit in jobs and wages than they are about the federal fiscal deficit.

More blog posts next week. Keep us bookmarked and join the conversation!

One Thing Pennsylvania Isn't Leading Other States in — Debt

Debt is a hot topic in Harrisburg these days, but often lost in the rhetoric is just how low Pennsylvania's level of debt is.

In our latest installment of February Fiscal Facts, we follow up an earlier report on Pennsylvania's debt service payments with a look at the state's outstanding debt situation.

Living within Our Means

If I were to ask you how much of the state budget goes toward paying off debt, what would you say? 10%, 30%, 50%?

Try between 3% and 4%.

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