Thursday, July 02, 2009

Budget deadline? What budget deadline?

The first day of the new fiscal year for Pennsylvania, July 1, 2009, came and went and the state is operating without a budget. Don't fret. It's not like we haven't been down this road before. Ed Rendell has missed the budget deadline every year since taking over as governor in 2003.

But there is something different about this year. Rendell is a lame duck and we are in the middle of the worst recession since World War II. Rendell has squandered most of his political capital on broken promises (property tax relief, business revitalization, health insurance for all, jobs).

Despite increasing General Fund spending by $8 billion since 2003 -- twice the rate of inflation -- Rendell's big government, tax-and-spend agenda has been a monumental failure.

Pennsylvania is much worse off today than it was when Rendell took over as governor. From a recent post at The Commonwealth Foundation's POLICY BLOG on the state's business climate:
Only 40 states have a better business climate than Pennsylvania

Forbes has issued its latest report on "The Best States for Business". Pennsylvania ranks 41st. Amazingly, despite Governor Rendell's "investments" in our economy, that represents a drop of two spots since last year.

Here are more recent rankings of Pennsylvania's economic and business climate:
* The Tax Foundation State and Local Tax Burden - 11th (50 is best)
* Small Business and Entrepreneurship Council Business Tax Index 2008 - 28 (1 is best)
* Pacific Research Institute State Tort Liability Rankings - 45th (1 is best).
* Beacon Hill Institute State Competitiveness Report 2007 - 34th (1 is best)
* ALEC-Laffer State Economic Competitiveness Index - 44th on Economic Performance; 37th for Economic Outlook (1 is best)
* Alliance for Worker Freedom Index of Worker Freedom - F (Tied for worst)
* Small Business and Entrepreneurship Council Policy Environment for Entrepreneurship. - 24th (1 is best)
* The Tax Foundation State Business Tax Climate Index - 27th (1 is best).
* CEO Magazine Best States to do Business - 37th (1 is best)
There's no reason for the Republican-controlled Senate to give into Rendell this year. Rendell's way is a dead-end. Incredibly, Rendell wants to increase state spending by $1 billion for the 2009-10 fiscal year even thought he just finished the last fiscal year with a $3.2 billion deficit.

Hey, Ed: The first rule of holes -- When you're in a hole, stop digging!

The only compromise on the table is for Rendell to accept the balanced budget adopted by the Senate last month. It calls for no tax increases and a decrease in state spending. In other words, Pennsylvania government must live within its means for the first time since Rendell became governor.

For more on the state's fiscal crisis, check out "Lawmakers miss deadline for state budget" in The Philadelphia Inquirer and John Baer's column in the Philadelphia Daily News, "When it comes to a state budget, we're king-less"

Originally posted at TONY PHYRILLAS