Tag Archives: 2012-13 fiscal year

Appeals for School Spending

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Students of the Pittsburgh Public Schools, education advocates, and parents of children in the District are in Harrisburg today to petition for more money for public education. At least one student stated "we need to prioritize the budget and make education the No. 1 thing like it was a long time ago".

Without any reference to when "a long time ago" was exactly, let’s look at it from the perspective of a high school senior who will graduate in June of 2013, just about when the 2012-13 fiscal year will be wrapping up. That senior would have been in kindergarten in the 2001-02 fiscal year. Here’s how the spending of $1 in general fund money compares now and then:

Fiscal Year

Education

All Other Functions

2001-02

42.3 cents

57.7 cents

2012-13

40.5 cents

59.5 cents

The other functions include health and human services, protection of people and property, direction of services, economic development, and other.

Education has been the top dog in state spending likely for much longer than the public school enrollment for the soon to be graduating senior. Keep in mind that Federal and local dollars are in the mix and that, for the Pittsburgh Public Schools, if there is an issue about in-class resources it should be noted that the last decade has seen tremendous growth in personnel and costs associated with folks who won’t step foot in a classroom and have a direct influence on the student.

Budget Pain in Pennsylvania

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Faced with a revenue shortfall in the current fiscal year and ongoing large hikes in the funds needed to cover pension costs, the Governor is almost certain to present a quite austere budget for fiscal year 2012-2013. And as expected the cries of "not fair" and "too harsh" are rising and will be heard vociferously in the days ahead.

Interestingly, when there are austere budgets and some programs get no increases or have actual cuts in their allocations, pundits and critics talk about the pain the budget will inflict. Isn’t it peculiar that the same pundits and beneficiaries of public largesse are seldom, if ever, heard commenting on the pain taxpayers are feeling when they are forced to cough up the money to fund programs and when their wallets are tapped even further to meet the spending demands of special interests?

No, it is always those whose gravy train is threatened who scream the loudest. Why is that? It’s a classic case of public choice theory. When the benefits of government spending are concentrated, as is the case with teacher unions, a decline in spending is felt more acutely than the pain of higher tax revenue spread over the entire population of taxpayers, many of whom have been convinced that tax hikes are a good thing. Then too, because so many special interest group members and their families and friends are also taxpayers, the ability of taxpayers to present a united opposition to tax hikes is even more difficult.

Thus, the beneficiaries often present a more strenuous opposition to spending cuts than the opposition taxpayers are able to mount against tax increases. Only by electing a majority of people who are fervently committed to resisting the massive pressure from many powerful groups to raise spending and taxes can the taxpayers ever have a fighting chance. Apparently, that is the case in Harrisburg right now. And that is driving the special interests nuts.

Will the current favorable situation last beyond the next election? One can hope.

2013 Budget Shortfall Blamed on Fiscal Discipline

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It was just announced by the state Budget Secretary that the Commonwealth will need to find $750 million in spending cuts to balance the 2012-2013 fiscal year budget. Revenues are continuing to fall short owing to the lingering high unemployment rate and despite some reasonably good private sector job gains.

Predictably, some members of the Legislature were quick to criticize the Governor for not doing enough to stimulate job growth and generate more revenue. Of course, what they mean by stimulate job growth is to borrow money and spend it on public sector projects that will use union labor. And of course, he should have spent any remaining rainy day fund to make sure fewer teachers got laid off. All unionized workers. Notice a pattern?

The problem is that borrowing comes at a cost. Raising taxes is not an option during a recession and balancing the budget is a Constitutional requirement. Thus, when the rainy day fund is inadequate to close a budget gap, spending cuts have to be made. If the previous administration had not insisted on increasing spending at rates well above inflation for two terms, the budget deficit would never have reached the $4 billion mark and the spending cuts would not have been so painful in the current fiscal year.

But for some, spending taxpayers ‘money, whether from taxes or borrowed and paid back out of taxes, is always the answer to budget problems and job creation. Apparently they have not noticed that all the Federal stimulus and deficit spending a long with extraordinarily easy monetary policy has had precious little impact on the rate of job growth nationally, especially in view of the gargantuan amounts of money being spent and created.