Friday, November 12, 2010

Outgoing, Incoming Govs Differ Over Debt

Governor Ed Rendell announced more than 40 million dollars of state investments in rail and airport projects across Pennsylvania this week.
However, it appears those types of debt-funded grants will likely be few and far between under the next administration.
Rendell is a strong defender of using state grants to fund both public and private projects, saying Pennsylvania earns back the money it invests through tax revenue and new jobs.
Governor-elect Tom Corbett is much more hesitant to dole out borrowed money, as he explained during an October debate.

"I think it’s a very risky situation. We have increased our debt here in Pennsylvania. Particularly in a time when our budget is suffering. Our spending has increased in the same amount of time by 40 percent. Our revenues have come down."

Corbett warned of long term implications...

"What we are doing is burdening our future generations with these kind of debts that are going to go forward until they’re all paid off. If we would stop right now, it’d be decades before we would pay off the money that’s been borrowed under the RACP fund."

Corbett’s policy paper on transportation issues leaves the door open for what it calls “the prudent use of debt to fund projects.”
But he’s said he’d be very hesitant to finance private projects, like the retail developments and hotels funded in this year’s major capital development bill.
However, Governor Rendell defends debt-financing for projects.

"Investment in transportation infrastructure, investment in infrastructure period is good for our economy. These are investments that come back to us in the taxes that are generated in a few short years, and most importantly, create jobs and create a better economic climate for our companies."

The so-called RACP debt limit increased from 1.5 to 4 billion dollars during the Rendell Administration.

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