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LEHIGH VALLEY WEATHER

Why do we have a budget problem? Our legislators are clueless

In the last couple of weeks, I have had the distinct displeasure of talking to two representatives for my area about the lack of a state budget. All I have gotten from both of them is the distinct impression neither of them understands basic economics or budgeting.

When presented with the fact that both the Independent Fiscal Office (of the Legislature) and the rating agency Standard and Poors, both non-partisan entities, have stated the so called ‘budget(s)’ for 2015 passed by the House are structurally deficient, that is, revenue does not cover expenses, neither gentleman would state any real means to fix the problem.

If revenues do not meet expenses, there are only two choices to fix the problem. You either raise revenues or you cut expenses. Or maybe both. Raising revenues usually requires raising taxes (unpopular) and both representatives are against raising any broad-based taxes (e.g., sales or income). Cutting expenses usually means cutting services and that is unpopular too. Apparently more so in an election year.

One, when pressed, only would talk about reforming pension plans to cut expenses. Anyone who has looked at the proposals for pension reform in any detail understands reforms do not cut expenses today, like would be needed to balance the budget, only those expenses 10 to 20 years in the future. Pension reform is a good thing, it just won’t help right now.

Reading from essentially the same ‘playbook,’ the other said he would reform pensions, sell the state stores and cut the budget 1 percent across the board to address the structural deficit. He also mentioned waste in welfare.

Like pensions, selling the state stores does not address structural deficits in last year’s and this year’s budgets. Revenue from a sale would not appear for one to two years at best and would be a one-time revenue much like the smoke and mirrors that went into creating the structural deficits in the first place.

Even the Commonwealth Foundation admits the structural deficits in the Pennsylvania budget would require a 3 percent across-the-board cut in spending to balance, far more than the 1 percent proposed by State Rep. Justin J. Simmons, R-131st. One also wonders if cuts were supposedly necessary to balance the budget, why they weren’t proposed by either representative?

Remember that unpopular in an election year thing?

Waste in welfare is a perennial favorite. Problem is, you need to find nearly $1 billion to fix the deficit and it is highly unlikely that much waste exists anywhere in the budget, let alone in just one item in the budget.

I understand not many people like increased taxes. I also have noted not many people are willing to cut programs that benefit them (such as senior citizen tax breaks or legislative salaries), but are generously willing to cut programs that benefit someone else.

Just to eliminate one more red-herring, property tax reform requires some form of broad-based tax increase to replace the revenue now generated by property taxes. There is no ‘cut’ there, just a shift as to who pays. There are winners and losers there and no solution to the budget deficit.

So, I’m forced to conclude that unless we elect people who are going to actually stand up and propose unpopular ways to fix the problem, we are stuck with both the budget impasse and a legislature full of people trying to keep their state paid jobs.

Oh wait, maybe that means our legislators aren’t clueless. They are just playing a game that benefits themselves more than the people of the Commonwealth of Pennsylvania as a whole.

Chuck Ballard

Emmaus

Editor’s Note: Chuck Ballard is a member of the East Penn School Board. This letter represents his own personal opinion and does not necessarily represent any position of the East Penn School District or its board.