January 14, 2010
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Lessons Learned from 2009
By Senator Mike Folmer

No Pennsylvania official – including the Governor and legislators – looked very good during the 2009 budget impasse that took 101 days to resolve.  We should not – and cannot – repeat this mistake of 2009.

The question at stake in the budget debate was whether state government should live within its means or continue to grow faster than inflation and the taxpayers' ability to pay.  From 1970 to 2008, our population increased nearly 5.5 percent (from 11.8 million to 12.4 million). Over the same period, state spending grew by an astounding 979 percent or from $2.6 billion ($221.99 per person) to $28.2 billion ($2,270.55 per person)!

It is remarkable how many individuals and organizations are dependent upon government for their existence.  Each has one or more constituencies that fight for continued or increased spending from the state coffers.  Many of these advocates call – or even demand – higher taxes to support their favorite programs or initiatives.

To me, looking first to increase taxes ignores the already heavy burdens taxpayers face – not just tax bills, but also indirect taxes.  Consider the hidden costs imposed on everyday items or other so-called "sin taxes."  These tax bites include the costs of sales taxes, corporate taxes, payroll taxes, property taxes, capital gains taxes, environmental costs, unemployment compensation taxes, workers' compensation coverage, and other fees and payments to federal, state, and local governments.

Soda costs nearly 38 percent more due to taxes.  Direct and hidden taxes make dinner out an additional 45 percent. Cable television and cell phone calls cost 46 percent more because of taxes.  In addition, hotel stays are 50 percent higher; gas and land line phone are over 51 percent more; domestic airfare is up 55 percent and car rentals are up 60 percent due to direct and hidden taxes.

For those of you who like "sin taxes," you'll be happy to know increased taxes make cigarettes 87 percent higher, distilled spirits up 80 percent, beer up 56 percent, and firearms 46 percent more.

Like many Pennsylvania taxpayers who resolve to diet in the New Year, it is time state government shed some fat too. Hopefully elected officials learned their lesson in 2009, and in 2010 we can focus on job growth, controlled spending, and lower taxes.