Op/Ed: An irresponsible budget

By Kathi Cozzone, Chester County Commissioner

Cozzone

Chester County Commissioner Kathi Cozzone

I worked in the private sector at large and small companies, in various financial management roles, for about two decades before becoming a Chester County Commissioner.  During the Corbett administration, I have watched from afar as legislators and the Governor concocted one bad budget after another.  Previous budgets funded education irresponsibly, forcing school districts to squeeze taxpayers to make up the difference.

Previous budgets have underfunded the state’s pension funds, a problem that goes back at least a decade, which has forced the state into a pension crisis of their own making.  As a result, the amount of real dollars allocated to schools for use in the classroom is still below what it was in the 2008-2009 budget, a problem that looks even worse if numbers are adjusted for inflation.

State spending must at least keep up with inflation to give school districts a prayer of passing budgets without property tax increases.  Of course, the Governor and his supporters in the legislature will spend the rest of this election year telling us that education spending is at an all-time high.  But when you look at the fine print, they are counting payments to the pension system as “education spending”; which is basically short-changing our kids for the mistakes of past Legislators and Governors.

Most disturbing of all, previous budgets have relied on one-time fixes, delayed payments, accounting gimmicks and raids of specific funds to get into balance.  Lawmakers seem utterly unconcerned with the sustainability of the state budget; instead being mostly concerned with how voters will react to the short term impact.  The gimmicks and one-time fixes would have put me in hot water at any of the private sector jobs I’ve held where I was responsible for submitting a budget proposal.  But this year saw financial game-playing reach new heights.

The budget makes $567 Million in one-time transfers from various funds that are set up to collect revenue and fund a specific purpose, such as the Tobacco Settlement Fund.  The budget counts on Federal dollars from the Governor’s yet-to-be-approved Medicaid plan and a proposed casino that does not yet have a license.   But worst of all, the budget magically increases projected tax revenues by $100 Million over what the Independent Fiscal Office projected for next year.

Keep in mind, this is the same office that underestimated this year’s tax revenue to the tune of over $600 Million!  That’s right, the Senate amended the original house budget to include a phantom $100 Million increase over an estimate that is already, if history is any guide, an overestimation to begin with.  As a Corporate Business manager in the private sector, I would have had to explain why my estimates were inflated.  Without a good answer, this would have been a fire-able offense when the chickens came home to roost a year later.  Shouldn’t this also be a fire-able offense for legislators who supported such an irresponsible budget?

Only days since becoming law, the cracks in the latest state budget are already starting to show.  Thanks to the use of one-time revenue sources and the inevitable deficit created by phantom revenue projections, Moody’s has downgraded our state’s bond rating.  This is the third year in a row that the state has seen a downgrade just after passing its budget from at least one ratings agency.  The legislature has failed to enact sensible new revenue sources like a natural gas extraction tax and failed to take up any legislation that addresses the state’s pension debt.  There’s no telling how far our state will sink unless we opt to change directions this fall.

 Kathi Cozzone is a Chester County Commissioner and candidate for the State Senate in the 44th District.

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Tags: deficit, finance, Gov. Tom Corbett, Kathi Cozzone, legislature, State bidget
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3 Responses

  1. Kathi,
    It’s so easy to criticize, but much harder to propose solutions. The article above is long on criticism and short on solutions. Just how much would YOU raise taxes and on who?

  2. ^ I double Keith’s comment.

    Liberals throw crap at administrations they don’t like, win an election after pushing enough negative propaganda, and then sit there either twiddling their thumbs or making things worse than even the Republicans can manage.

    Also, the irony of a Democrat insulting a budget…. ho ho ho! As if they understood what a budget was!

  3. Kathi,
    More specifically, you state that “Previous budgets have underfunded the state’s pension funds, a problem that goes back at least a decade”. Who was governor BEFORE Corbett? Rendell, a Democrat?

    The issue continues to be that everyone in both parties want to point at what’s wrong with everyone else, rather than offering effective solutions. Let’s stop the blaming game and start the fixing game. Republicans and Democrats, set aside all this partisan bickering and solve the problem! Fix the pension system that is $50 Billion in the red and lowering our state credit rating! This is the single most important financial issue facing our state for the next twenty years!

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