Skip to content

State Government Too Broken For Legislature to Fix

August 23, 2017 Business Tax Relief

For Rep. Steve Bloom (R-Cumberland), it’s time to turn Harrisburg’s troubles over to a higher authority. Partial and late budgets, declining credit ratings, costly and error plagued state contracts, and a trail of corrupt officials are symptoms of deep structural problems, he says, and a constitutional convention is the only way to fix them. “These are issues the Legislature is either unwilling or unfit to take care of,” Bloom said.

Bloom, in the House, and John Eichelberger (R-Blair), in the Senate, will soon be introducing legislation that would call for the assembling of a constitutional convention (Bloom’s bill will be HB 1967, in honor of the year when the last convention was held).  Both measures will permit delegates to the convention to open up only those areas of the state Constitution that cover the operations of the three branches of government: the Legislature, the Executive, and the Judiciary.

Bloom said he has received early support from some of his colleagues, but it will be up to the citizens to put enough pressure on Harrisburg to get the legislation through both houses. “The legislature won’t act against its own self interest unless voters compel them to,” he said. 

David N. Taylor, President, PMA said that Bloom/Eichelberger plan gets to the core of what’s ailing state government. “The problems have been long known,” Taylor said. “And over the years attempts have been made at reform. But a reform here and there doesn’t right the ship.”

The budget problems over the last few years have alone begged for institutional changes.

Governor Tom Wolf began his term in office asking the legislature to approve an unprecedented level of spending fueled massive tax increases in a year when the state could little afford its current spending rate. Over the next few years, legislative leaders, to their credit, held him off but did little to address budget problems stemming from earlier years. Perhaps the biggest of these being the increase in pensions lawmakers gave themselves and state workers in 2001. That and under payments, or in some years no payments, into the pension system by the executive branch – its obligation as the employer – led to a running public pension deficit that’s gobbling up billions in revenue.

As with last year, the legislature sent the governor the spending portion of the overall budget while it scrambles to put together the revenue plan. In late July, the Senate effectively admitted that the funding transfers and accounting gimmicks of earlier years had run their course; it sent the House a tax increase and borrowing plan. The House has yet to act.

Bloom said that he would hope one change made by the convention would require the governor to place funds in budgetary reserve when it’s clear tax revenues aren’t coming in as predicted. “It would have been prudent to reserve spending to avoid creating a deficit situation like we now must address for the recently completed 2016-17 fiscal year,” he said.

Only Harrisburg benefits from the Senate revenue plan. An analysis by the Commonwealth Foundation shows that the tax increase and borrowing plan would lead to 3,600 lost jobs and the loss of nearly $1 billion in families’ disposable income through 2018, a new analysis says. The study, which is based on the Boston-based Beacon Hill Institute’s State Tax Analysis Modeling Program (STAMP), also found that the tax hike would lead to a $142 million drop in business investment in its first year.

A convention, Bloom also believes, would lessen corruption in Harrisburg. “My hope is the convention will place more constraints on behavior of elected officials,” he said.

And he hopes would it would likewise lessen the number of “poorly structured contracts,” like the one Labor & Industry had with IBM to update the state’s unemployment compensation system. In March, the Wolf Administration announced that it was taking IBM to court over the contract that was years behind scheduled and way over budget. All the way back in 2013 Governor Tom Corbett pulled the plug on that contract, relying upon an independent assessment recommending that the state Department Labor & Industry not continue with the project – by then already 45 months behind schedule and $60 million over budget.

In a joint statement announcing their convention legislation, Bloom and Eichelberger said that beside the cost of government there is also a “disturbing patterns of insider dealing and rampant crony capitalism. Special interests continue to push unrestrained government spending, unaffordable taxes and job-killing overregulation.”

 “We’ve been suffering through a lot of problems that are getting a lot of attention that I don’t think the Legislature and the governor can fix,” Eichelberger said. “We don’t have the political will, we don’t have the broader vision to do it. We’re mired in day-to-day and election cycle-to-election cycle decisions. We’re not getting things done.”

The legislation calling for the convention would go before the voters for approval after clearing the House and Senate.