Pa. Spending Cap A fiscal straitjacket

Posted: November 12, 2005

Colorado voters came to their senses over the folly of forcing state government into a straitjacket on taxes and spending. So, why in the world are some Pennsylvania lawmakers trying to put Harrisburg in similar fiscal shackles?

Separate Senate and House bills approved in recent weeks would restrict state spending increases by a formula based on inflation and population growth. Exceptions to the cap could be made only for emergencies, federal mandates, and extra spending approved by super-majorities of the legislature.

That seems to fit into the sensible notion that government should live within its means. So why not peg spending growth to inflation? Because the result could be a disaster.

One recent analysis shows that had state spending since 1986 been limited to the inflation rate, there would have been $5.5 billion less to address many pressing public needs. The labor-backed Keystone Research Center in Harrisburg assumed that critical areas such as education, public health, and law enforcement would have been funded. But without that $5.5 billion, nothing would be left for higher education, protecting the environment, economic development, maintaining state parks and a host of other critical investments needed to move the state forward.

Don't just take a think tank's word for it. Colorado's Republican Gov. Bill Owens came to the same conclusion about his state's 1992 constitutional amendment, the so-called "Taxpayer Bill of Rights" or TABOR. After a boom-and-bust cycle of tax revenue growth and retrenchment, Owens concluded that Colorado soon would be unable to pay for essential services. So he pushed to suspend TABOR limits for five years, winning a majority vote to do so in a state referendum. Now the Colorado treasury will get to keep $3.7 billion to provide services that otherwise would have been slashed.

California voters similarly decided Tuesday that arbitrary spending restrictions could hurt more than help. They voted down Proposition 76, which would allow their governor to unilaterally cut spending when revenues did not meet projections.

The push for Pennsylvania to join 30 other states with spending caps may have more to do with gubernatorial politics than fiscal stewardship. A veto by Gov. Rendell of the GOP-sponsored bills would make good campaign fodder for possible 2006 opponents such as Majority Whip Jeffrey E. Piccolo (R., Dauphin), a fan of spending limits.

Rendell should veto any TABOR measure all the same. There's less to most states' tax and spending limit laws than meets the eye, inasmuch as they typically provide ways to bypass the limits. They often just substitute political window-dressing for true fiscal responsibility.

House Majority Leader Sam Smith (R., Jefferson) contends there's nothing wrong with exploring spending controls, since he counts himself among lawmakers who haven't done enough to limit spending. There's a simple response to that reasoning: Just do your job, lawmakers. Don't foist off tough decisions on a calculator or a computer program.

But, wait . . . That raises another thought. Go ahead, enact rigid tax and spending rules that, in effect, put Harrisburg on auto-pilot. Then, every legislator can resign - pay raise or no. They won't be needed anymore to make tough decisions about which government services to fund.

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