When businesses and families are faced with a loss of income or an increase in expenses, the typical reaction is to look for ways to reduce spending to ensure they are capable of paying their bills. In comparison, when state government is faced with a shortfall in revenue, the mantra of many elected officials in Harrisburg is to raise taxes. To consider raising taxes without first identifying internal cost savings is illogical, not to mention irresponsible.
As the General Assembly and the governor prepare the final budget for the 2010-11 fiscal year, the state is facing a shortfall of $1.2 billion in revenues that will only continue to grow if we don’t curb spending.
Additionally, Commonwealth Court recently ruled that the state must return $800 million to the Medical Care and Reduction of Error (MCare) Fund, which was used to balance last year’s budget; and the federal government rejected the commonwealth’s application to toll Interstate 80, leaving the state with nearly a $500 million gap in transportation funding. In total, we are facing a structural deficit of $2.5 billion to $3 billion, which puts us in the same position as last year. However, there are no reserve accounts to rely upon this time.
For the last several months, we have been working together to find ways to reduce the cost of state government and increase revenues without affecting taxpayers. Through analysis and research of state government operations, we determined that the commonwealth could earn from $550 million to $1.5 billion (depending to what degree the ideas are implemented) in revenue without raising taxes.
First, the state should expand the use of purchase cards (P-Cards), which is a faster, more accountable way to pay for expenses and items purchased by the commonwealth. Similar to debit cards, P-Cards would detect fraud sooner, reduce the amount of administrative time necessary to process paperwork and timely issue checks to vendors.
Our estimates indicate that using P-Cards for 20 percent of the state’s transactions would earn a $62 million return on the rebate. If the state were to process 70 percent of its transactions via P-Cards, it could earn $219 million.
Second, to expand on what Pennsylvania has done for itself since 2003, the commonwealth could generate $50 million to $152 million annually by processing other states’ Supplemental Security Income) payments. At a cost of $12 per transaction, nine states pay the Social Security Administration more than $300 million annually to process payments. Since Pennsylvania began processing its own SSI payments in 2003, it saved more than $35 million each year.
Third, Pennsylvania taxpayers could save $36 million each year by reducing the state’s vehicle fleet by one-third and requiring all state employees to rent vehicles for trips over 100 miles.
With nearly 17,000 state vehicles, taxpayers are shelling out $72.5 million per year for maintenance, insurance and other related costs.
In 2008, Pennsylvania spent $24 million on mileage reimbursement of state employees who used their personal vehicles for state travel. The commonwealth could save $24 million by reducing its fleet and $12 million by requiring state workers to rent a car for official travel.
The operations of state government should be reviewed to ensure taxpayer dollars are being used efficiently, effectively and appropriately.
Our suggestions are neither Republican- nor Democrat-focused, they are good government ideas that, in many cases, have been proved to work in other states.
Regarding use of the P-Cards and SSI, we use processes that the state already does on a limited basis and we are suggesting expanding them to help balance the general fund budget.
We need to be responsible, find immediate solutions and think long term.
Let’s take the idea of tax increases off the table and look inside state government to determine what can be consolidated and streamlined.
In the interest of taxpayers, who are still struggling from the effects of the economy, government must live within its means.
Rep. Sheryl Delozier represents parts of Cumberland County. Rep. John Bear represents parts of Lancaster County.
This appeared in the June 13, 2010 edition of the Harrisburg Patriot-News. The views expressed are those of the authors and do not necessarily represent the views of the Susquehanna Valley Center.
Nothing contained here should be considered as an attempt to aid or hinder the passage of any legislation before the General Assembly.
