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District Offices

166 South Main Street
Chambersburg, PA 17201
Tel: 717-264-3943
Fax: 717-264-2893

703 Municipal Drive
Shippensburg PA 17257
Tel: 717-532-1707
Fax: 717-532-5043

Capitol Office

Rm 312 Main Capitol
PO Box 202089
Harrisburg, PA 17120-2089
Tel: 717-705-2004
Fax: 717-787-9840

Email:
rkauffma@pahousegop.com
 

Controlling Debt a Big Piece of the Budget Puzzle
3/14/2012
After years of spending and borrowing beyond our means during the Rendell administration, Pennsylvania is facing many of the economic realities stemming from those decisions. Although I always opposed the borrowing schemes of the previous administration, they still were successful in enacting legislation for Pennsylvania to use borrowed money for additional spending. Pennsylvania’s debt service has now risen to over $1 billion per year.

These decisions are part of the puzzle that has left us with another difficult budget year. The House Appropriations Committee just concluded 11 days of budget hearings in an attempt to gather sufficient information in order to tailor the state budget to address the Commonwealth's most pressing needs. Once again, the Legislature will strive to produce a workable budget that addresses our core government responsibilities while facing a $500 million revenue shortfall on top of our mounting debt.

One of the biggest hindrances we face, in relation to the budget, is the amount of debt we have incurred, which is why I am a co-sponsor of House Bill 2175. This legislation reforms and redefines the Redevelopment Assistance Capital Project (RACP) program, which funds improvement projects statewide. You may be more familiar with this program as the source of $10 million in funding for the Arlen Specter Library at Philadelphia University, and $10 million in funding for the John Murtha Policy Center in Johnstown.

Created in 1999 with an initial debt ceiling of $1.2 billion, the RACP has since raised its debt ceiling six times for a total of $4.05 billion. This amount of debt is not only unfortunate, but unconscionable. We cannot continue to carry this type of debt if we are to get ourselves back on track to fiscal health.

At its heart, House Bill 2175 would incrementally reduce the RACP debt ceiling annually until it reaches $1.5 billion. The program’s eligibility requirements would be redefined to finance buildings and related infrastructure projects with a total cost of at least $1 million, which would have a substantial economic impact on the community. In addition, the projects must be at least 50 percent privately funded. The legislation would also create a more stringent review and approval process within the Office of the Budget, which would develop eligibility criteria and establish guidelines for the process.

There is no doubt this is a worthwhile program that has helped jump start economic development initiatives across the state. However, to be truly effective it must be managed appropriately and prudently, so as not to become a financial liability. House Bill 2175 was approved this week by the Pennsylvania House of Representatives and is now awaiting consideration by the Pennsylvania Senate.

This is the type of reform that desperately needs enacted in order to ensure the best oversight of taxpayer dollars. If borrowing is to occur, it must be done under stringent restrictions and not for political gain. We cannot change the past, but we can make changes today to reset our priorities and get our state out from under a mountain of debt brought on by the previous administration.

For more information on the state budget and other legislative news, visit my website at
www.RepKauffman.com.
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