Government on a Diet:Spending Tips 2009

From Sunshine Review

Wasteful Spending identified in the Governor's 2008-09 Budget include categories such as:

• Corporate Welfare
• Yellow Pages Government
• Self-Service Government

[edit] Corporate Welfare

Corporate welfare forces all taxpayers to surrender money which is redistributed to select entities in the form of a tax break or government aid. Government-directed “economic development” programs award tax dollars to companies or projects for the benefit of a few, at the expense of the many. Usually taxpayer-funded welfare is handed out to private interests that are politically connected. Corporate welfare exists in a variety of of forms, including "walking around money" grants (WAMs), appropriations which lawmakers and the Governor can award at their discretion.

Some examples of Corporate Welfare include:

• Hazelton Airport: The proposed airport would benefit from $250 million in taxpayer funding, on the claim that it will revitalize the economy of Hazleton by creating 5,548 local jobs.This in spite of the fact that every major cargo carrier has expressed no interest in using theairport, and several key players are facing criminal accusations.If such a project was economically viable, the private sector would be eager to fund it without bribery and an airlift of taxpayer money.

• Boscov’s Bailout: State officials are asking several counties to back a $35 million loan for the bankrupt department store chain Boscov’s, with state taxpayers insuring the counties’funding (circumventing a constitutional prohibition on state government pledging credit to a private company). This in spite of Boscov’s reported a record $26 million profit in December 2008 alone. Proponents have assured county officials that such a loan is risk-free, but if it is such a bargain, the private sector would be willing to put up money. While the majority of Pennsylvania businesses are small, only a large corporation, with the many political connections of Boscov’s, could receive such a gift from taxpayers.

[edit] Yellow Pages Government

Although government properly provides various public goods—such as law enforcement, courts, and roads—the Commonwealth also distributes many “private goods.” These are goods and services that are easily found in the Yellow Pages of a phone book and are the proper domain of private enterprise, not enterprising politicians.

Some example of Yellow Pages Government include:

• State Liquor Stores: Pennsylvania is one of only a few states in which government owns and operates liquor stores, rather than licensing and regulating private vendors.Privatization would increase state revenue, but also provide consumers with more products. The state would accrue corporate and property tax revenue from liquor stores, whereas now they are nontaxable. Pennsylvania would also benefit from competitively contracting out all Liquor Control Board operations—one estimate projects a $1.7 billion one-time influx of funds.

• Pennsylvania Turnpike Commission: Another way to slim down Pennsylvania’s spending is to take advantage of private-public partnerships in transportation, particularly in the case of the Pennsylvania Turnpike Commission(PTC), which has long been a haven of political patronage and nepotism. The PTC has a reputation for persistent, expensive lobbying. In the first part of 2007, the PTC ranked fourth nationally in terms of taxpayer-funded federal lobbying.However, the federal government still denied the PTC permission to toll I-80, a critical source of revenue under Act 44.

[edit] Self-Service Government

The core functions of the government involve providing those services and goods which clearly benefit all citizens. However, a number of state programs and expenses actually work to the detriment of citizens, for the benefit of government officials, or reward the misuse of taxpayer dollars.

Some examples of Self-Service Government include:

• Lottery Advertising: The FY 2008-09 budget includes $32 million in advertising to promote thestate lottery. Although any taxpayer-funded advertising is wasteful spending, lottery advertising is particularly disconcerting. Other unnecessary advertising expenditures cited in this study are well-intentioned efforts to encourage desired behaviors, but lottery advertising is aimed at deceiving the public and manipulating them into believing they have strong odds of winning. Pennsylvanians would be much better off investing in their retirement than buying lottery tickets from Gus the Groundhog. A Tax Foundation study found that for every dollar spent each month on lottery tickets, participants lose an estimated $41,444 inretirement savings over a 40-year period.