May 2010 Column - House Republicans Offer Specific Cost Saving Ideas without Tax Increases
As we near the end of the 2009-10 fiscal year, Pennsylvania once again finds itself in a very difficult financial position. Revenue collections are more than $1 billion below estimates. In other words, Pennsylvania government is on pace to spend $1 billion more than we have. This is irresponsible and it is unacceptable. It is past time for state government to do what every family in Pennsylvania is doing. We must tighten our belts and we must look for opportunities to save money anywhere we can find them.
Gov. Ed Rendell and House Democrats do not share that view. They have offered a budget proposal that would increase state spending by more than $1 billion over last year and raise taxes to pay for it. Rendell has increased state spending every year since he took office. With Pennsylvanians facing continued high unemployment rates and price increases on everything from groceries to gasoline, the spending spree must stop. We simply cannot afford to continue increasing spending and expect taxpayers to foot the bill.
House Republicans understand that reality and we have begun identifying new revenue sources which will enable us to balance our budget without the need for additional taxes. Our plan has the potential to generate nearly $1 billion in new revenue for the Commonwealth without increasing taxes one penny.
Our plan would generate revenue several ways including:
- Making so-called purchase cards or “P-cards” the primary method of payment for all goods and services purchased in Pennsylvania, saving between $63 million and $219 million annually.
- Correcting tax refund errors. The Department of Revenue sends 2 million tax refunds each year with an error rate of 10 to 12 percent. Reducing this error rate could save the Commonwealth $50 million annually.
- Reducing the state auto fleet by one third and requiring state employees to use rental vehicles for trips more than 100 miles. This could save the Commonwealth $36 million every year.
- Eliminating Medicaid eligibility errors which could save $288 million to $1 billion annually.
- Improving unclaimed property law compliance. Properly reporting property deemed forfeited could save the Commonwealth $50 million to $80 million each year.
- Adopting the National Conference of State Legislatures’ Voluntary Streamlined Sales and Use Tax Agreement to streamline sales tax and Internet sales tax collections. This could result in $21 million in revenue for the Commonwealth.
- Examining the feasibility of processing other states’ Supplemental Security Income payments. In 2003, Pennsylvania became the only state in the nation to process SSI payments in-house. Currently, nine states and the District of Columbia pay the Social Security Administration to process SSI payments for a fee of approximately $12 per transaction. Pennsylvania can process those payments for a lower fee, saving those states money and generating between $50 million and $152 million in annual revenue for the Commonwealth.
We hear a lot of talk from elected officials about fiscal responsibility, doing more with less, and tightening our belts to make it through these tough economic times. Unfortunately, in many cases, it is just talk. With our plan of non-tax, cost-saving ideas, House Republicans have demonstrated our commitment to making government smaller, more efficient, and more effective.
Rep. Dave Hickernell
Pennsylvania House of Representatives
Contact: Sean Yeakle
House Republican Public Relations