Senate_Chamber,_Pennsylvania_State_Capitol_Building

It’s not rocket science, spending drives demand for tax hikes, and the ability to raise taxes fuels spending.

Focusing on the spending side of the ledger, legislators in Pennsylvania have proposed the Taxpayer Protection Act (Senate Bill 116/ House Bill 1316). The bill, sponsored by Senator Camera Bartolotta and Representative Ryan Warner, would limit overall spending increases to the rate of inflation, plus population growth. A supermajority vote could override the limit.

Revenues that come in above the spending cap would first go into the state’s shallow rainy day fund. The state will also need to thoroughly review state programs to ensure spending growth is kept within the TPA index.

This is a great, pro-taxpayer measure for any state, but is especially necessary for Pennsylvania.

The Keystone State has seen its population stagnate, and even shrink in some recent years – losing 260,000 residents in 2016. The state and local tax burden costs residents $4,589 per year. While that is more competitive than some of its eastern neighbors, taxes are still driving people away.

This trend of leaving the state is especially prevalent amongst people aged 20-35. The Pennsylvania Independent Fiscal Office reported that 47,000 people in this age bracket with at least an associate’s degree left the state in 2015.

The good news is that from 2012 to 2017 Pennsylvania’s spending declined relative to state GDP, dropping nearly 20% by that metric, fifth most in the nation. Republican legislators having control of the state purse strings is largely why. Democrat Governor Tom Wolf has certainly pushed for his fair share of bad tax and fiscal policy since taking office in 2015.  

Passing the Taxpayer Protection Act now would go a long way to preserving this progress on spending restraint, limiting the ability of future legislatures to waste the public’s money.

Spending restraint is also broadly popular, Republicans, Democrats and independents each reported at least 67% support for the measure, according to Susquehanna Polling & Research.

Now is the perfect time to get the Taxpayer Protection Act done.