By Rep. Matthew Dowling (R-Fayette/Somerset)
It’s been a long year. Feelings of isolation and concerns for our own health and the health of our loved ones have been compounded for many people by serious financial hardship brought on by a reduction in work hours or a total loss of their livelihood in the face of the COVID-19 pandemic.
We all just want to move on and return to our normal lives. We want our economy to recover so we can provide for ourselves and our families, rather than having to rely on the government for help.
We were just starting to feel some optimism about the situation when Gov. Tom Wolf outlined his budget proposal for the coming fiscal year and said he wants to increase spending by more than 8% to over $40 million, increase income taxes by more than 46% on families and small businesses, and impose a new tax on the energy industry that will be passed on, at least in part, to consumers.
I’ll be clear here. There is no way I will support these proposals.
The last thing our citizens and our employers need right now is a greater financial burden and more dysfunctional government programs that are supposed to “help” them. Ask anyone who has been forced to file for unemployment during the pandemic how that has worked for them!
Yet that is what the governor’s budget plan is all about…bringing in more revenues so he can grow state government and spend more of your hard-earned money on the things he deems important.
The Personal Income Tax (PIT) proposal is especially troubling for a couple reasons. Small businesses – the ones that employ the vast majority of people in the Commonwealth – are subject to the PIT. Those same businesses that were forced to shut down while big box stores were allowed to remain open, the ones that are still struggling to recover from the economic damage done by the governor’s mitigation efforts, would see their income taxes go up by 46% under the Wolf plan. Talk about kicking people when they are down.
The increased taxes will impact all families and individuals by reducing their take-home pay, even though the governor claims they’ll be paying less because they’ll get a full or partial refund upon filing their tax returns. Aside from the fact he’s reducing everyone’s take-home pay, this progressive type of taxation is unconstitutional in Pennsylvania. He wants to expand the poverty exemption to people who are clearly not impoverished, which is unfair to other taxpayers. And did I mention it was unconstitutional?
The governor is once again calling for a severance tax on the natural gas industry, falling back on the false narrative that we are the only state without such a tax so the industry isn’t paying its fair share. The real problem for the governor is we opted for an impact fee that allocates funding directly to counties rather than sending it to Harrisburg for him to spend on his pet projects.
The current rate of the impact fee sits at 4.51%, a rate above the average severance tax collected in other states. Come June, it will have generated more than $2 billion for communities across Pennsylvania to invest in things like infrastructure, emergency preparedness and response, environmental protection and more. Add that to the other business taxes energy companies must pay, and the industry is clearly paying more than its share.
Ironically, the governor wants to use his proposed severance tax revenue to leverage borrowing for a program to provide financial help to the businesses he has hurt through his closure orders. Let’s think about that. We are going to impose a new tax on the energy industry we all rely upon to power our cars and heat our homes (putting energy jobs at risk) so we can saddle future generations with significant debt to bail out the businesses the governor has harmed with his aggressive business closure orders. It simply doesn’t make sense.
These are just a few of the pitfalls in the governor’s proposed 2021-22 state budget. Rest assured I will oppose these plans that will only prolong the economic struggles facing our families and small business owners. I will instead work with my colleagues to develop a budget that will support economic growth, focus on funding the core functions of government and be respectful of the taxpayers who foot the bill.
Representative Matthew Dowling
51st Legislative District
Pennsylvania House of Representatives
Media Contact: Patricia Hippler