State Spending Cuts Continue

Governor Rendell has “discovered” an additional $111 million in spending cuts bringing the total up from $200 million to $311 million. The cuts are a result of the efforts of state agencies to cut budgets but 4.25% at the request of the Governor. The Department of Community and Economic Development has cut their budget by 5.65%.

Here are the numbers:
$78 million in education spending (less than 1% of budget)
$72 million from the Public Welfare Dept.
$35 million from the Community and Economic Development Dept.
$27 million from corrections

Senator Fumo has suggested using the $750 million dollar rainy day fund in addition to the governor’s cuts could close the revenue gap and avoid a tax increase. But why use the state’s rainy day fund which is keeping Pennsylvania’s credit rating at double-A despite over $100 billion in bonded debt, when the Commonwealth Foundation has already identified $6.6 billion in wasteful spending?

Perhaps the bigger question is why it took a economic downturn to discover this much unnecessary spending? Of course the economic climate hasn’t stopped Rendell and the Governor’s association from asking for more money from the feds,

"Earlier this week, in his role as chairman of the National Governors Association, Governor Rendell sent a letter on behalf of the nation’s Governors asking Congress to pass an economic recovery package that helps states and spurs economic growth by temporarily increasing the federal matching rate for Medicaid and providing additional funds for infrastructure investment.”

Massive bailout bills are simply unsustainable without increasing tax revenues. While the presidential candidates have fully embraced tax cuts, these, along with tax credits allow government to pick economic winners and losers. Increasing the tax burden on one section of the population just to lighten someone else’s tax burden does nothing to solve the underlying problem of out-of-control spending.