PA Budget Facts 2010

Pennsylvania Budget Facts 2010

Today, the Commonwealth Foundation released two fact sheets on the Pennsylvania State Budget, and offered testimony on ways to reduce fraud and abuse in welfare programs.

Unemployment Compensation

• Pennsylvania has borrowed over $3 billion from the federal government to keep its unemployment compensation fund solvent.

• Only California, with three times the population and a much higher unemployment rate, pays out more in unemployment claims.

• Governor Rendell is advocating expanding benefits eligibility and increasing the threshold of taxable income. These changes would allow the Commonwealth to qualify for a one-time $270 million in stimulus aid, but would cost taxpayers an estimated $60 million per year, long after the stimulus money disappears.

Get more facts about Unemployment Compensation

Tobacco Taxes

• Gov. Rendell proposed a tax of 30% on the retail price of cigars and smokeless tobacco products, in hopes of collecting $42 million in the upcoming fiscal year.

• House Democrats recently proposed to exempt cigars from the excise tax, but increase the cigarette tax by another 30 cents per pack, expecting to generate $194 million.

• Based on the Pennsylvania State Tax Analysis Modeling Program (PA-STAMP), this tax hike would result in 3,000 fewer private sector jobs in 2011 in the state.

Get the facts on the Tobacco Taxes

Testimony: Welfare Fraud and Abuse

Since Governor Rendell took office in 2003, General Fund spending on public welfare has ballooned. In his FY 2010-11 budget, public welfare is set to receive an increase of $482 million. That would bring the increase in public welfare spending since 2003 to 68.2% (41.3% in inflation-adjusted spending).
This dramatic increase in expenditures is especially worrisome given that the Department of Public Welfare is the focus of constant audits and investigations revealing evidence of widespread abuse and waste. Recently, Auditor General Jack Wagner uncovered fraud in several state Department of Public Welfare (DPW) programs that could represent $1 billion or more in misspent money.

Click Here for the Full Testimony

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For more on the Pennsylvania State Budget, visit CommonwealthFoundation.org/Budget