February 2009

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State Sen. Daylin Leach and his family
News and Opinion

The Department of Waste, Fraud and Abuse
Why the budget process is so difficult

-- Sen. Daylin Leach

I am writing this the day after being sworn in to the Pennsylvania Senate after serving three terms in the House. During my tenure I've served through six budget cycles. I've worked through the numbers and wrestled with how to fulfill our constitutional duty to pass a balanced budget in the face of the demand for government services (high) and the desire to pay more in taxes (low). I think that over time I've learned a few things about the budgeting process and have become aware of some of the misconceptions surrounding the budget. I thought I'd take this opportunity to explore why the budget process is so difficult.

First, one of the questions I am frequently asked when I am venting about a tough budget cycle is, "Why don't you just cut the fat out of the budget?" That is a legitimate question in theory, but in practice its a bit more complicated. First, there is no "Department of Waste, Fraud and Abuse" whose budget can be cut. Cutting "fat" actually means cutting the budget of vital government services. I can't promise that every dollar of our $28.3 billion budget is spent perfectly, but after six lean budgets in a row, there is very little obvious "fat" to be cut.

The fact is that the budget is composed of thousands of specific line items. So if we were to want to cut, say education, we wouldn't just lop 10% of the education appropriation and assume no one will notice. We'd have to go through specific expenditures and cut them. For example, "this school loses their music department;" or "this school's leaking roof doesn't get fixed;" or "this district doesn't get computers." Cutting Medicaid funding means removing specific people from their nursing homes, or denying specific veterans wheelchairs.

Similarly tough choices would be involved in cutting the health care budget, or transportation, or law enforcement. After we get through these categories, there really isn't a lot of money left. Sometimes these tough decisions have to be made, but we should not pretend that the things we cut aren't important or that we can reduce the budget deficit without causing any pain to anyone.

The other thing to remember is that even if we wanted to cut a lot of these programs, we can't. Much of the money we spend at the state level is the result of federal mandates, which require us under the law to provide certain services. In the area of education for example, the federal No Child Left Behind and Individuals with Disabilities Education Act, mandate the expenditure of billions of dollars for basic and special education. Medicaid, the Clean Air Act, and a myriad of other health care, environmental, educational, occupational safety, and homeland security laws force states to spend money. At the end of the day, very little of our state budget is truly discretionary, so when we have to cut, purely state programs such as libraries, aid to fire companies and economic development funds are particularly hard hit.

There is also some misconception surrounding the various grant programs that exist. The press frequently lumps them all together under the rubric of WAMs or "Walking Around Money." The implication being that legislators have large wads of state cash that we give out to our buddies, This isn't remotely true, although it makes for entertaining reading and apparently does sell papers. The fact is there are several types of grants.

There is something known as the R-Cap budget, which is money allocated by the legislature and released at the discretion of the governor for capital projects around Pennsylvania. This money goes towards things like building a community center or helping a military college build a new set of classrooms. Individual legislators can lobby for projects in their district, but ultimately it is up to the entire legislature and the governor to decide which projects get funded.

There is also a whole series of competitive grants administered through various agencies. For example, the Department of Environmental Protection may be allocated several million dollars to go towards streambed remediation. Various municipalities or private entities apply for the grants and each project is scored according to specific statutory criteria, with the highest scoring projects getting the money while it lasts.

There are "Legislative Initiative Grants," which are in the general discretion of individual legislators. But that discretion is not unbridled. To be eligible for a grant, an entity must be non-profit and non-sectarian. The theory of legislative initiative grants is that individual legislators know best what is most needed in their district and will thus direct grant money to the most worthy recipients. I have found this personally to be true. The grants I have secured have paid for things such as defibrillators, bulletproof vests for police officers, thermal imaging cameras that will save the lives of fire-fighters, and storm-water management projects.

Finally, there is a lot written in the press about what they call a "slush" fund controlled by legislative leaders. This money is completely different from and not related to any of the other grant programs I've discussed. This fund was created to fund vital government services in the event of a government shutdown during a budget crisis. Since I have not been a member of leadership, I have not been privy to the details of how this fund is controlled. It does seem to me that while the purpose may be legitimate, the amount in the fund may be excessive, especially given the other compelling needs we are unable to fill in this tough budget cycle.

I hope this has given you some sense of how the budget process works. You'll be reading a great deal about this year's budget battle in the newspapers over the next few months. Now you'll be even more excited to open the paper and devour these articles than you were before.

State Sen. Daylin Leach was elected to the Pennsylvania Senate in November 2008 after serving six years in the state House of Representatives. He represents parts of Montgomery and Delaware Counties.

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