The state budget process in Harrisburg is broken and must be reformed.
We are now in the midst of my seventh state budget since I first arrived at the State Capitol as a House member in 2011. Not only has it been difficult to meet the June 30th statutory deadline each year, but state political leaders seem incapable of addressing the underlying issues driving the structural deficit.
The Independent Fiscal Office Economic and Budget Outlook for Fiscal Years 2016-17 to 2021-22 outlines the challenges our state now faces. Our population is rapidly aging, and we expect to see an overall decrease in population of those between the ages of 20 and 59. These trends will have a significant impact on expenditures and revenues.
Although lawmakers have cut funding in the budget wherever possible, mandated spending for human services and public pension obligations continues to push spending totals higher. These demographic changes are also contributing to productivity, workforce participation, and employment challenges. This is projected to result in continued tax base erosion and slow revenue growth.
I used to believe that Pennsylvania has a spending problem, and not a revenue problem. I now believe we have both a spending and revenue problem.
Since taking office as State Senator, I have been working to advance an opportunity agenda focused on policies promoting strong families, vibrant communities, quality schools, and the free enterprise system. Today, I am even more convinced that the answer to many of these challenges we are facing is economic opportunity and upward mobility.
We must do all that we can to make Pennsylvania an attractive place for our children to go to a good school, earn a degree, form families, involve themselves in the broader life of our communities, become employed, become entrepreneurs and employers.
Yes, we have a revenue problem but the answer is not generating new short-term revenue through new taxes on Pennsylvania families and business. The answer is a pro-growth agenda that generates new dollars through enhanced economic activity.
Unfortunately, I have far too often found our budget process a barrier to an opportunity society and pro-growth economic policy in Pennsylvania.
This is why I have joined with some of my colleagues in the Senate to propose various budget process reforms. Fortunately, legislators have the power to fix the current broken process, and I am committed to working toward that end.
An idea I have advanced is a biennial, or two-year budget cycle.
Through a constitutional amendment, this proposal would require the enactment of a budget covering a two-year period. The goal is to increase efficiency and productivity in state government, and encourage long-range planning among state agencies and other entities receiving state appropriations.
In the last ten years, Pennsylvania has only seen an on-time, enacted budget three times. As we have seen, consistently ignoring the statutory deadline only hurts our state and its people – change is necessary.
A two-year budget cycle would help to facilitate comprehensive planning by incorporating a long-term perspective and allow for increased predictability in the budget process which would reduce the costs of both time and resources. Such a process would also allow for in-depth review and evaluation of state programs and encourage outcome-focused budgeting.
Our current annual budget process is time-consuming, repetitive, and inefficient. Repeating this fight every year only contributes to the complexity of the budget process and encourages delay.
Furthermore, a biennial budget would remove the annual fiscal balance requirement which often serves as a barrier to pro-growth policies. Instead, fiscal balance would be achieved over a two-year cycle, when the full impact of economic development investments, pro-growth tax and regulatory reforms are more likely to be more fully realized. History has taught us that it is unrealistic to expect to see the full benefit of these types of initiatives over the course just one year. Our budget process should recognize this.
Finally, a biennial budget would assist in moving Pennsylvania towards a performance based budget. This would require all departments and agencies to justify their budget requests beginning with dollar one, for all existing as well as proposed programs for each fiscal year.
Common in the private sector, this type of budgeting would allow us to better keep control of expenses and outcomes, and be another critical check on the growth of state government services and programs.
The goal would be to highlight those programs that are exceptional and to identify those areas of our government that are ineffective. Performance based budgets help manage existing resources better and help make the case when additional resources are necessary. Like individuals, families and businesses do every day, we should be supporting programs and services that work and reform or eliminate ones that do not.
I am proud to offer my ideas and to work with other reform-minded Senators on their ideas.
It is my hope that, like a breath of fresh spring air, maybe these proposals will promote a renewal in our ability to effectively govern and build an opportunity society in Pennsylvania– together.
It’s time to act.