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Policy Alert: There is No Surplus!

June 13, 2011 J

Amazingly, with great debt looming over us in Pennsylvania, there are some elected officials who are insisting that we have a “surplus” and many special interests have their eyes on spending it. AFP-PA has issued the following statement in which we strongly urge the governor and legislators to do the right thing with our money.

A vote could come any time now. Please don’t hesitate to reach out to your legislator and let him or her know that we have a debt crisis to address–not a surplus to spend. Tell them there is no such thing as a surplus when the bills are not paid in full. Click right here to find your legislator. Reach out today and tell your senator or representative to “do the right thing!”

For prosperity,

Sam Rohrer, State Director
Jennifer Stefano, Director of Communications
Katy Abram, Director of Policy
Vonne Andring, Director of Field Operations


With the Governor and the legislature in the final days of creating and passing the 2011-12 General Fund Budget, many voices are clamoring for increased spending in their area of interest. For some Senate leaders, the unexpected ‘surplus’ of nearly $500 million dollars is like the proverbial ‘money burning a hole in their pockets.’

As adults, we understand that just because you have a little spare change, you don’t need to spend it. Considering the magnitude of this state’s debt, this ‘surplus’ amounts to nothing more than spare change, but there is a very important principle here nonetheless. There is simply no justification for increased spending. Until the bills are paid, and there is no debt, there is no surplus.

AFP-PA urgently calls on the governor and the Republican leaders in the House and Senate to reject any request to spend this ‘surplus’ for the following reasons:

* It is fiscally and ethically dishonest to call this a ‘surplus’.

* There can be NO honest surplus when the state is in debt. The facts are that the state has an actual debt of $92.3 billion! (Institute for Truth in Accounting Report)[1] The debt is comprised of $59 billion in reported liabilities but $33.4 billion in unreported pension obligations. Then there is a nearly $4 billion debt of unemployment compensation owed to the federal government; and $800 million owed to the medical malpractice fund (Mcare Fund) which was inappropriately spent by Governor Rendell.

* To spend any of this ‘surplus’ is to demonstrate a serious lack of personal discipline and a total disregard to the fiscal state of this Commonwealth and the economic condition of our state’s economy.

* In presenting this state budget, the Governor and legislative leaders have made no provision for the payment of this Commonwealth’s known debts. To spend this ‘surplus’ would reflect a further disregard for their Constitutional oath to support a balanced budget and a disrespect for the citizens to whom this debt is owed.

What should be done with this money? Under normal conditions, this money would be placed in the mandatory savings account called the Rainy Day Fund. However, when our former governor and legislative leaders agreed to accept Federal Stimulus funds, they also agreed to a federal mandate that prohibited the Commonwealth from putting any money into the Rainy Day Fund. With this voluntary restriction in place, there is only one right thing to do. This ‘surplus’ money should be used to fulfill our debt obligations such as to the State Pension System and to the payback of our $800 million debt to the Mcare Fund.

AFP-PA urges the Governor and the Legislature to do the right thing.

[1] TruthInAccounting.org

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