Lawmakers Can Ease Financial Worries of Pennsylvanians

Member Group : Commonwealth Foundation

(This article first appeared in Lancaster On-Line)

By Stephen Bloom

The struggle is real.

When asked about their families’ financial situation, only 17% of Pennsylvanians see themselves as better off now than two years ago, while 42% believe they’re in a worse position, according to a poll conducted for the Commonwealth Foundation.

Despite the noise generated by partisan claims of an improved economy, Pennsylvanians struggle to afford groceries, pay their electricity bills and provide a quality education for their kids.

Two out of three Pennsylvanians agree that taxes on paychecks are too high. Rather than proposing new spending and generating debt, Harrisburg must incorporate tax relief into the new state budget.

Conveniently, such a tax cut is on the table for consideration. The Pennsylvania Senate recently passed bipartisan legislation, Senate Bill 269, which would cut the personal income tax rate from 3.07% percent to 2.8%.

This cut would provide around $3 billion in extra income to Pennsylvanian wage earners and small business owners. Fewer dollars taken out of paychecks will generate the economic development our commonwealth desperately needs.

Pennsylvanians also feel anxious when their utility bills arrive. Voter polling conducted for the Commonwealth Foundation earlier this year shows 70% of Pennsylvanians worry over their ability to afford their family’s energy needs.

Lawmakers can ease their troubles. In addition to cutting income taxes, Senate Bill 269 also proposes cutting Pennsylvania’s 4.4% gross receipts tax on the profits of private utilities. As The Associated Press explained, this tax dates back to the 1800s. Eliminating it would mean electric utilities would no longer pass this added cost down to ratepayers.

Moreover, lawmakers must reject Shapiro’s latest energy-related recommendations: the Pennsylvania Climate Emissions Reduction Act and the Pennsylvania Reliable Energy Sustainability Standard. These measures would inflate energy costs by imposing an onerous, punishing carbon tax and increasing quotas on less efficient, costlier energy sources.

Rather than picking winners and losers in the energy market, lawmakers must focus on source-neutral policies that prioritize affordability and reliability to help Pennsylvanians keep their lights on.

The traditional Harrisburg “solution” is to throw more money at education deficiencies. Yet, including state and local property tax funding, Pennsylvania already spends $22,544 per student, according to the National Center for Education Statistics — that’s $4,083 more than the national average.

Despite this record-level spending, academic performance lags. Nearly half of Pennsylvania’s fourth and eighth graders cannot read at grade level, and more than half of fourth graders and nearly 75% of eighth graders cannot perform math at grade level, according to 2023 Pennsylvania System of School Assessment results.

Pennsylvania students and families can’t wait for yearslong strategies to address these academic gaps. COVID-19 school closures taught us that even one year of educational disruption has devastating consequences.

Lawmakers must provide immediate solutions, such as “lifeline” scholarships. The state Senate recently advanced this initiative in a bipartisan vote out of the Education Committee as Senate Bill 795, which refers to it as the Pennsylvania Award for Student Success scholarship program. By providing private-school scholarship accounts to the thousands of students trapped in Pennsylvania’s lowest-performing schools, this program could make private education a financially feasible option for low-income households.

Parents already invest in their kids’ education through their tax dollars. With lifeline scholarships, that public investment directly funds the student, not the chronically failing system.

To maintain school choice, lawmakers must not cut funding for charter schools. Charter schools, which have lower operating costs than traditional public schools, represent the fastest-growing population of Pennsylvania students. Cutting funding to these successful schools would diminish the educational options so many vulnerable Pennsylvania families rely upon.

For the 2024-25 budget, lawmakers must abide by a simple principle: Do no harm. Everyday Pennsylvanians are struggling, and lawmakers, at the very least, must not impose further burdens on their financially strained constituents.

Rather than incessant partisan quibbling, lawmakers should get to work sparking genuine economic development by cutting taxes, shrinking energy bills and expanding educational choice. This will educate our children for the future and put money back in taxpayers’ pockets, easing the anxiety many Pennsylvanians feel today.

Stephen Bloom, a former state representative, is the vice president of the Commonwealth Foundation, a free-market think tank. X (formerly Twitter): @StephenLBloom and @Liberty4pa.