Don’t Just ‘Get it Done’

Member Group : Commonwealth Foundation

State Budget: Don’t Just ‘Get it Done,’ Get it Done Right
Hiking Taxes to Meet Budget Deadline Is Price Too High

June 24, 2016, HARRISBURG, Pa.—With less than one week until the June 30 budget deadline, legislative leaders should resist the temptation to "get it done" at the expense of getting it right for Pennsylvania families.

The latest budget negotiations center on a potential $31.5 billion spending plan, which would represent the largest spending increase in a decade and require $1.1 billion in additional revenue. The House has already moved to raise $200 million through gambling expansion and$150 million through tax amnesty. And while broad-based tax increases appear to be off the table, lawmakers are considering targeted taxes and other unstable revenue generators, including:

• A harmful tobacco tax that would hike the per-pack tax on cigarettes by $1.00 and hit poor households the hardest.

• A rumored energy tax that would raise home-heating costs for more than 2.7 million homeowners.

• Higher taxes on bank savings accounts.

• A new tax on Uber and other ridesharing services.

"Last year, Pennsylvanians were spared Gov. Wolf’s crushing tax hikes because lawmakers stood firm for a responsible budget. Now is not the time to stand down and allow the governor to force $1 billion in new or higher taxes on Pennsylvanians," commented Matthew Brouillette, president and CEO of the Commonwealth Foundation.

A $31.5 billion budget would represent a spending increase of more than five times the rate of inflation and a $1.5 billion increase over the current year’s spending. And it would leave in place more than $700 million in wasteful corporate welfare subsidies that should be cut before taxes are considered.

"We urge lawmakers not to be swayed by any hyperbolic doomsday rhetoric," Brouillette continued. "Last year, Gov. Wolf claimed we had a $2.3 billion deficit that would require $4.6 billion in new taxes. He said that unless lawmakers raised taxes, Pennsylvania would have to cut a billion dollars from education. Yet, lawmakers increased education spending by $250 million without raising taxes by one penny.

"More is at stake than a calendar deadline. Lawmakers must think beyond June 30 to the long-lasting negative impact tax hikes would have on hardworking Pennsylvanians. Lawmakers must not settle for just getting the budget done—they should ensure it gets done right."

Matthew Brouillette and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or [email protected] to schedule an interview.

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