Op-Ed: Fixing Rendell’s Mess

Penn’s Woods are darker and deeper in red ink than ever before thanks to the tax-borrow-and-spend agenda of the Rendell Administration and some General Assembly members who failed to put Pennsylvania back on a path to prosperity.  To add insult to injury last month, the U.S. Census Bureau announced that Pennsylvania would lose another Congressional seat in 2012 due to stagnant population growth.

Over the past eight years, Gov. Rendell increased the state operating budget by $21 billion, or 45 percent, leaving an estimated $5 billion deficit for his successor.  His unchecked borrowing has tripled budgeted interest payments, while increasing debt held by state agencies, like the Turnpike Commission, by 93 percent. Today, every Pennsylvania taxpayer owes almost $10,000 in state and local government debt. 

With that kind of legacy, it’s no wonder Pennsylvania experienced a net loss of 38,000 taxpayers in state-to-state moves from 2003-2008, taking with them $2.1 billion in income. According to IRS data, Florida, Virginia, North Carolina, and Delaware-states with lower tax burdens and more economic freedom-are the most popular destinations for Pennsylvania expatriates.

Gov. Rendell has doled out billions of tax dollars in the name of economic development to bribe businesses to “create jobs.”  Yet, since Gov. Rendell took office, Pennsylvania lost a net 5,500 jobs-including almost 22,000 private sector jobs lost while government jobs grew by more than 16,000. Despite press release promises, these “corporate welfare” handouts to companies like Boscov’s-which received $35 million in 2009-have hindered, rather than helped, job growth in the commonwealth.

One common target of these “economic development” schemes was alternative energy companies, who have benefited from $1 billion in renewable energy grants, tax breaks, and loans, but only created 8,300 “green” jobs, costing taxpayers over $120,000 per job. But subsidies and mandates to create green jobs result in a net loss, destroying jobs of other colors.

Governor Tom Corbett faces a tough road ahead fixing the mess Gov. Rendell will leave behind.  Yet, there are many opportunities to return fiscal responsibility, economic freedom and in time, people to Pennsylvania.

For starters, Corbett should end corporate welfare to politically connected companies-Pennsylvania is the second highest spending state on so-called economic development grants-and focus on improving the overall business climate.  The first step is balancing a budget without new taxes, and eventually lowering the state’s tax burden, currently the 11th highest in the nation.

A top priority for the new administration should be limiting lawsuit abuse; Pennsylvania’s  ability to control tort costs is pitiful, 46th out of the 50 states. The commonwealth is a breeding ground for jackpot justice. Defendants are held financially responsible based on their wealth, not their involvement. Uncapped punitive damages and skyrocketing insurance premiums are shutting down businesses and discouraging professionals from practicing.

Corbett should also work to repeal Pennsylvania’s prevailing wage mandate. Prevailing wage laws inflate the cost of government construction contracts by upward of 30 percent, forcing school districts and municipalities to pay higher wages than those paid by the private sector for the same job.

Ending the state’s monopoly of mediocrity under full control over alcohol sales will attract new businesses and additional tax revenue streams to Pennsylvania. Privatizing the state-run system will also bring competition into the market, providing savings for customers, and end the border bleed of residents crossing into New Jersey, Delaware, and Ohio for better selection and lower prices.

Finally, Corbett should protect the Marcellus Shale golden goose from short-sighted grabs to garner more state revenue through a natural gas tax or fee. The industry has stimulated the economy, saving family farms and putting tens of thousands Pennsylvanians back to work. It is clear that politics and the desire for more revenue are driving calls for a severance tax.

It’s only fitting that tax-borrow-and-spend Gov. Rendell is leaving taxpayers a parting gift of $400 million in new bonded debt, but Gov. Corbett has the opportunity to leave a very different legacy. Instead of undermining growth by bribing businesses to come or stay, reforming the business climate to make the state attractive to all companies, along with eliminating lawsuit abuse, repealing prevailing wage laws, privatizing alcohol sales and allowing Marcellus Shale development will ensure Corbett’s term is one of prosperity for current and future generations of Pennsylvanians.

Katrina Currie is a research associate and Nathan A. Benefield is director of policy research with the Commonwealth Foundation (CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.

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5 thoughts on “Op-Ed: Fixing Rendell’s Mess

  1. Paul Dietzel

    Aaron T, Katrina & Becky – I’m not sure that I know what “flow reasons” means but, yes, I do feel that by placing “Gant Team” at the top and the original source of the article at the very bottom does somewhat obscure the fact that the article is not a product of the Gant staff. But, obviously, it’s your site and those decisions are up to you.

    Ms. Currie asks why I did “not discuss the merits of the article”, but “attacked the Foundation” instead. My post was not intended to dispute the allegations against the Rendell administration – they may well all be entirely correct. My intention, whether I was successful or not, was to simply reveal a little bit of information about the source and let other readers draw their own conclusions. I am sorry that Ms. Currie feels that listing the names some of of the people on the Foundation’s board and their affiliations constitutes an “attack”.

    There are countless groups with names so generic that those names reveal little or nothing about their political orientation. If we had no prior knowledge about these
    groups who would know whether it’s the “Heritage Foundation” or “People For The American Way” that veers to the Left or the Right? “Commonwealth Foundation” is just such an innocuous name.

    And so I felt it apropos to observe, again in my opinion, that the Commonwealth Foundation’s self-description of “independence” and their “Guarantee of Quality Scholarship” are both a bit disingenuous given the makeup of the Board and staff.

    Paul Dietzel, Clearfield

  2. Aaron T. Evans

    The way our system is set up, we have to have a “post author” on each article. Would it make you happier if we put “Katrina Currie is a research associate and Nathan A. Benefield is director of policy research with the Commonwealth Foundation (CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.” at the top of the article? The only reason we put the article writer’s name at the bottom, if it is not one of our’s, is for flow reasons, not whatever reasons Paul Dietzel is alleging. Let us know!

  3. Paul Dietzel

    This morning’s Op-Ed “Fixing Rendell’s Mess” is identified initially as being authored by “Gant Team” but in scrolling down we find that it is in fact the work of: “Katrina Currie is a research associate and Nathan A. Benefield is director of policy research with the Commonwealth Foundation (CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg”. Sounds interesting. But just who and what are the Commonwealth Foundation and just how “independent” are they?

    Clicking the link (above) takes us to their site, where we can read who is on their Board of Directors, which includes –

    Mr. Michael W. Gleba (Chairman), is the President of the Sarah Scaife Foundation.

    Mr. Matthew J. Brouillette (President & CEO), Previously an advisor to the curiously named American Acadamy for Liberal (? ) Education which was co-founded by Lynne Cheney

    Mr. T. William Boxx, Chmn. & CEO of the Philip McKenna Foundation which has contributed to, among others, the Heritage Foundation and the American Enterprise Institute

    Mr. Frederick W. Anton III, President of the Pennsylvania Mfrs. Assoc. and a delegate to the 2000 & 2004 Republican National Conventions.

    Mr. Glen Meakem who authors the website “Glen Meakem Conservative Insight” and founder of FreeMarkets and in which role he was lauded by the (Scaife owned) Pittsburgh (nee Greensburg) Tribune-Review

    Links from the Commonwealth Foundation’s site include “FreedomWorks”, “Kitchen Table Patriots”, “Pennsylvania Conservative Council”, “Pennsylvania Revolution”
    “Tea Party Patriots”, “UnitePA” and more.

    I will leave it up to others to decide whether they in fact agree or disagree with the views of any or all of the above affiliations, but please spare us the fiction that the Commonwealth Foundation is in any way indepedent of a particular political persuasion. And by extension, apparently neither is gantdaily.com .

    Paul Dietzel, Clearfield

    • Katrina

      Instead of attacking the Commonwealth Foundation, why not discuss the merits of the article, which you neglected entirely.

      Commonwealth foundation has a “Guarantee of Quality Scholarship” for all are publications. We are committed to providing Pennsylvanians with reliable information. CF welcomes critical review of its work, including this article. If an error exists, the Commonwealth Foundation will issue an errata sheet that will accompany all subsequent distributions of the publication, which constitutes the complete and final remedy under this guarantee.

      As CF’s mission statement clearly shows we advocate principals based on “individual liberty, free enterprise, and limited, accountable government.”

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