House GOP Reveals “Taxpayers Budget” Right in Time for House’s Return to Session

Last week, before the House made its long-awaited return to Harrisburg to kick off its scheduled fall session, a contingent of House Republicans – aptly named the Taxpayers Caucus – held a press conference to unveil a no-tax increase revenue plan that would complete payment of the $32 billion budget that became law on July 10. The plan is an alternative to the Senate-passed Tax Code, which would impose $600 million in tax increases on natural gas companies, and gas, electric and phone customers – an approach that the PA Chamber continues to urge House lawmakers to oppose.

The “Taxpayers Budget” would rely on $1.2 billion in transfers from 41 state special funds that, according to the group, have “inordinately high” account balances. This would be coupled with a combination of $1.1 billion worth of other non-tax revenue sources to fill budget gaps from last year and the current fiscal year. The state’s operating budget contains 218 special funds that have both a balance for yearly operating expenses and a reserve balance, creating what state Rep. Joe Emrick, R-Northampton, referred to as a “shadow budget” during the press conference. Included are: a $50 million transfer from the Hazardous Sites Cleanup Fund; $72.7 million from the Environmental Stewardship Fund; $100 million from the Underground Storage Tank Indemnification Fund; $357 million from the Public Transportation Public Trust Fund; and $120 million from the Multimodal Transportation Fund – the last of which provides a dedicated source of revenue for passenger and freight rail lines, ports and waterways, airports and hiking and biking trails.

The response to the Taxpayers Budget from leaders of the other caucuses has been mixed. House Minority Leader Frank Dermody, D-Allegheny, said he appreciated the workgroup’s effort and would continue to review it, but told Capitolwire that “House Democrats believe that an honest budget solution must include the use of recurring revenue sources such as a severance tax on gas drillers and a higher minimum wage for Pennsylvania’s workers, among other steps. We are committed to working in a bipartisan way with Republicans to do the job that must be finished.” Senate Republicans are also taking a “wait-and-see” approach to the budget negotiations, pending action on the legislation by the House in the coming week. “While the leaders are open to new ideas that are passed by the House, we are fearful that the new House plan would harm agricultural, environmental and transportation projects across the commonwealth while not addressing long-term budgetary concerns,” Senate GOP spokeswoman Jenn Kocher told the media outlet.

Gov. Tom Wolf’s spokesman J.J. Abbott offered a more negative response, saying that the plan offers “even less clarity” about what can be done to balance the budget. “Raiding these funds will mean cuts to programs,” Abbott stated, adding that “shifting money from public and multimodal transportation sets back progress in municipalities small and large across Pennsylvania.”

Another revenue-related press conference last week was held by state Rep. Gene DiGirolamo, R-Bucks, who offered up an alternative plan should the Taxpayers Budget not receive enough support in the chamber. His leading suggestions for filling the budget gap were to implement both a severance tax on the natural gas industry and to increase the Personal Income Tax rate, which currently stands at 3.07 percent. During the event, he expressed his opinion that enough support in the House exists for a PIT increase.

As seen in The Sentinel, a weekly publication of the Pennsylvania Chamber of Business and Industry.