Taxpayer Caucus hears opposition to Senate-passed revenue plan

Taxpayer Caucus hears opposition to Senate-passed revenue plan

Author: Alanna Koll/Wednesday, August 16, 2017/Categories: News and Views, Pittsburgh

The legislative taxpayer caucus, met in Allegheny County at a hearing hosted by caucus member Rep. Jason Ortitay (R-Washington) this week to discuss the state Senate’s most recent budget revenue proposal to balance Pennsylvania’s $31.99 billion budget for the FY 2017-18.  

The caucus heard from a panel of utility officials, natural gas industry suppliers and workersas wells as taxpayers who were mostly critical of the plan that would place an extraction tax on Marcellus Shale drillers and a gross receipts tax on natural gas customers, as well as a tax hike on electricity and phone bills.  

Currently the rates charged by electric distribution companies include a tax on the gross receipts of electricity at the rate of 5.9 percent. The Senate has proposed increasing that tax to the rate of 6.5 percent which would result in an increase in electricity bills for our consumers and customers across the state,” said Kyrsia Kubiak of Duquesne Light. “Not only would residential customers see an increase in what they pay for electricity, but commercial customers will be significantly impacted, as well.”  

Members of the natural gas community echoed similar sentiments, stating that the proposed gross receipts tax places a disproportionate burden on natural gas customers to pay for the cost of state government. 

Natural gas customers will pay two taxes including a 5.7 percent gross receipts tax on natural gas distribution which many use to manufacture their products, heat their homes, cook their food, and heat their showers,” added Adam Lanier of Columbia Gas. “Right now, Columbia’s average bill is $90 a month. A gross receipts tax would be an additional $5.44 a month for each individual customer on average.”  

Elizabeth Stelle of the Commonwealth Foundation and various lawmakers of the caucus pointed to those taxes as being the reason people are leaving the state and causing economic growth to remain stagnant.  

“When you look at college graduates, they are leaving at a rate of 36 a day to try and find a job in another state,” said Stelle. “How do we create economic growth? Well, taxes have the opposite impact.”  

She pointed to a 40 percent wholesale tax that was place on e-cigarette sales in last year’s budget that she said caused about 100 vape shops across the Commonwealth to go out of business as one example of the state stifling economic growth through raising taxes.  

“Not only are you raising taxes, but you’re slowing the economic growth and making the problem worse,” said Stelle 

“The more we keep raising taxes and the more we continue to raise revenue for government spending, the more people are going to leave,” added Rep. Ortitay.  

Others on the panel pointed to the state’s lack of restraint on spending and believe reigning in the spending issue to be top priority.  

We wouldn’t be here if Harrisburg would restrain spending,” said Beth Anne Mumford of Americans for Prosperity. Year-over-year, we continue to spend more money than we have and what we take in and that’s just not responsible government.”  

Rep. Seth Grove (R-York), a co-chairman of the caucus, argued that cost-drivers, and not tax increases, should be the aim of legislators to address the Commonwealths’ budget woes. 

“The only way we fix this is to go after the cost drivers that hold up our budget by hundreds of millions of dollars each and every year,” added Rep. Seth Grove (R-York) “If we do not bend the cost curve of Pennsylvania, we will be sitting here year after year talking about how can we fund this budget, where are the revenues going to come from to try to fix our spending addiction.” 

He said the House now has their opportunity to now come up with a spending plan for the budget that is focused on available money that’s already out there.  

“We’re sitting on billions of taxpayer dollars already. Empty out the coffers before we talk about borrowing against the tobacco settlement fund- money is sitting there to do that. There’s liquor, there’s gaming, there are multiple other ways to garnish the amount of money we need,” he said 

“I’ve talked to a lot of the leadership team and they are looking for a counter-proposal that respects taxpayers,” Rep. Grove added. “It’s been where we’ve been at since April when we passed a responsible budget over to the Senate. They haven’t lost that mantra. We haven’t really put taxes on the table and we continue to advocate for taxpayers and responsible spending within the budget.”  

The Taxpayer Caucus is set to hear from another panel on the topic of the proposed Senate revenue plan on August 22 in Brookville, PA.  

The next scheduled date for the House to return to session is Monday, September 11.