Senate version includes tax increases on natural gas, electricity, and phone service.
Months after approving a 2017-2018 state budget, the Pennsylvania legislature has still not been able to agree on how to pay for it. In addition, there is a large budget deficit from the previous fiscal year to fill. Now a group of Republican House members has announced that they have devised a solution that includes no new taxes and no borrowing. The team of GOP lawmakers spent much of the summer searching for pockets of existing funds to cover the gaps.
At the end of July, in the other legislative chamber, the state Senate passed a funding bill that would add a 5.7-percent tax on natural gas, and increase taxes on electricity and phone service. Many Republican House members balked at that plan, saying it depended on tax increases and “reckless borrowing.” Seeking an alternative, a group of state Representatives scoured the books to find funds that they say, “are sitting idle in specially designated government accounts with high, unused balances.”
This week the group announced it had found enough money in accounts created by previous legislatures for issue-specific projects or programs to cover the budget without taxes or borrowing. They claim that state agencies will still “operate as expected and there will be no impacts to core government programs and services.” The group proposes to tap currently unused dollars in programs which include an agricultural preservation fund, a hazardous site cleanup fund, a machinery, and equipment loan fund, and a public transportation fund.
The House Taxpayer’s Caucus held hearings in recent weeks on the Senate plan. NFIB members from around the state testified at those hearings about how the Senate’s bill’s proposed increases in energy and other taxes would negatively impact their businesses.
The Legislature is expected to return to Harrisburg next week to address these budget funding issues, and the latest House GOP plan is to be considered. To learn which state Representatives introduced the no-tax plan, and find out more about what funds they plan to tap, CLICK HERE.
