Two months after the state spending became law on July 11, the House is returning to voting session in an attempt to bring outstanding budget issues – primarily how to pay for the $32 billion plan – to a close.
I voted NO on the budget spending plan (House Bill 218) because I feared the exact situation that has played out over the past two months – passing a bill to spend money before we knew where the money would come from could result in us becoming reliant on unsavory revenue sources, such as higher taxes. Many of my regional colleagues, such as Reps. Bud Cook (R-49), Carl Metzgar (R-69) and Ryan Warner (R-52) had the same premonition and voted NO.
On July 27, the Senate approved, by a close 26-24 vote, a Tax Code bill (House Bill 542) that was supported by the governor and seeks to impose nearly $600 million in new taxes. Based on our population, that would amount to $180 in additional taxes for every family of four in Pennsylvania. I am proud to say that my senator, Sen. Pat Stefano (R-32), voted NO on this piece of legislation. We don’t need to tax people more – we need to spend less!
Many of the proposed taxes would fall on the natural gas users. A gross receipts tax on natural gas (home and business heating bills) would be reinstated at a rate of 5.7 percent. And yes, “reinstated” is correct – this zombie tax, returning from the grave, was eliminated in Pennsylvania in 2000.
The Senate also suggested a severance tax on top of the existing natural gas impact fee, which already functions as a tax. Legislators from the east tend to favor this tax because their region would get more from a severance tax than they do from the impact fee, which is primarily directed to help communities where drilling takes place fix roads or replenish other depleted resources. A severance tax takes money from an industry primarily located in the west and gives some of the proceeds to the eastern part of the state where they have moratoriums on some forms of drilling.
Claims that the tax would be paid by the industry rather than consumers are off the mark as well. It is estimated that only 7 percent of this tax will be paid by lease holders, and 93 percent will be passed on to consumers. The Independent Fiscal Office has written that “most of the tax is pushed forward into higher prices and borne by natural gas consumers.”
While the natural gas taxes would have an especially significant impact on Southwestern Pennsylvania, the Senate also voted to raise or add taxes to electricity, fireworks, online shopping and telephones.
We need to put an end to this budget funding stalemate, but this is not the way to do it. As my grandmother used to say: “Haste makes waste.”
Hearings have been taking place on the viability and impact of the Senate revenue plan across the state, and on Thursday here in Fayette County at my request. The House has also been carefully considering other options to generate the revenue necessary to pay for this year’s overindulgent budget. On Sept. 5, a group of House Republicans unveiled a proposal that would tap into Pennsylvania's "shadow budget," which contains more than 200 special funds with an estimated surplus of about $12 billion. The premise is that we should use these unreasonable surpluses to balance the budget and pay off last year’s budget deficit before raising taxes on working families.
After two months of gathering feedback from area residents about the budget, I intend to represent my district by saying NO to Gov. Tom Wolf and by holding the line on new taxes in Pennsylvania.
Representative Matthew Dowling
51st Legislative District
Pennsylvania House of Representatives
Media Contact: Patricia Hippler