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For Immediate Release
10/18/05
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Pippy: Senate Panel Endorses State Spending Control Measures

Would tie state spending to personal income, inflation rate.

Harrisburg -- The Senate Finance Committee today unanimously approved the Taxpayer Fairness Act, which would hold the line on state spending to ensure that the Commonwealth lives within its means and has adequate savings for fiscal downturns, according to Sen. John Pippy (R-37), co-sponsor of Senate Bill 4. 

The committee also approved a companion measure co-sponsored by the senator, Senate Bill 884, which would amend the state constitution to hold state spending increases to inflation. In addition to restricting state spending growth, the bills would set aside surplus revenues into the state's Rainy Day Fund for use in times of economic necessity. 

"The Taxpayer Fairness Act simply makes state government do what Pennsylvania families have to do year after year, and that's live within its means," said Pippy. "The legislation uses a sensible formula to limit increases in state government spending to the average rate of change of inflation plus state population growth for the three preceding years. All surplus tax revenue would be placed in the Rainy Day Fund to help offset the need for any future tax increases." 

According to the National Conference of State Legislatures, 30 states have implemented spending controls, revenue controls or both. Pennsylvania is in the minority of states which have no such controls. 

The measures approved today would restrict state spending growth to the lesser of:

• The average annual rate of change of personal income in Pennsylvania for the three preceding years; or
• The average rate of inflation plus the average percentage change in state population for the three preceding years.

Both the statute (SB 4) and the constitutional amendment (SB 884) include three common-sense exceptions:

1. In the event of an emergency or major disaster declared by the President, the spending limit may be exceeded by a simple majority vote.
2. In the event of other declared emergencies, the governor may request an increase in the spending limit. This would require a three-fifths vote.
3. For any other circumstances, the governor may request an increase in the spending limit. This would require a two-thirds vote.

The Taxpayer Fairness Act is part of the Republican agenda known as the Playbook for Progress unveiled earlier this year by Senate and House Republicans.

"This is tested – most states have some sort of spending controls – and it's something Pennsylvania taxpayers want – with polls showing nearly 70 percent want to limit state government spending," said Pippy.  "The legislature should approve this and get it in the hands of the governor as soon as possible."

The measure now moves to the Senate Appropriations Committee, which is expected to consider the bill next week.

CONTACT: Matt Campion (412) 571-3822