Bills to Limit State Spending Introduced

Taxpayer Protection Act would return revenue surpluses to citizens

Following up on his pledge to take legislative action to set fiscally responsible limits on state government spending, Senator Bob Regola has introduced a bill that would enact the Taxpayer Protection Act through a constitutional amendment.

Senator Regola’s bill, Senate Bill 7, is a joint resolution providing for a constitutional amendment that would limit state spending to the average inflation rate plus the average percentage change in state population over the three preceding years.

SB 7 is mirrored by Senate Bill 707, a measure introduced by Senator Mike Folmer, that would provide the same limitation, but not as a Constitutional Amendment.

Both bills were referred to the Senate Finance Committee for consideration.

“Governor Rendell’s proposed budget is a dramatic example of why Pennsylvania needs to rein in state spending,” Senator Regola said. “If the Taxpayer Protection Act were in place, there would be no need to raise $2.5 billion in new revenue through seven tax increases like the Governor has proposed.”

In addition to the spending limits in the Taxpayer Protection Act, the proposal also sets realistic restrictions on the use of any unanticipated revenues received by the Commonwealth.

Specifically, 75 percent of any revenues exceeding the spending limits imposed by the bill would be returned to the taxpayers. The remaining 25 percent would go directly into the Rainy Day Fund to help the Commonwealth cope with unanticipated revenue shortfalls.

 “In my experiences working with my family’s small business, I have found that it is essential to control spending and stay within financial constraints. Government must operate under those types of constraints as well,” Senator Regola said. “We have a responsibility to the people of Pennsylvania to ensure that state spending is prudent.”

While the legislation sets clear limits on spending, it also provides some exceptions for certain extraordinary circumstances.

“It is crafted to recognize that not even the best financial planners can predict the future with certainty,” Senator Regola said. “We need to be firm in our resolve to limit spending; but at the same time, we must be pragmatic and provide a safety net that would allow some flexibility during times of emergencies.”

SB 707 could be enacted this year, while the constitutional amendment proposed in SB 7 must be approved by the Legislature in two successive sessions and be approved by the voters as well.

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Contact:           Tom Hower      (717) 787-6063