Lawmakers' Choice: Higher Taxes or Real Reform

Half the state budget is done: the spending list. The Pennsylvania House and Senate passed a general appropriations bill on Friday.

But the other half—how to pay for it—remains. The next couple weeks will be critical to determine whether we adopt meaningful fiscal reforms or ask working families to pay more.

Here’s what’s potentially on the table.

Job-killing tax hikes and risky borrowing schemes

• Income tax or sales tax increase: Dead…we think.
• An additional natural gas severance tax: Probably dead…but government union leaders are still pushing it.
• Borrowing against pensions to play the stock market: Reportedly dead…keep an eye on it coming back as a zombie though.
• Tech tax: Seemingly dead…or is it just sleeping?
• Electricity tax: Alive.
• Drink tax on bar and restaurant patrons: Very much alive.

Meaningful reforms that remain in play

• Meaningful reforms in the welfare code. If we are to put our fiscal house in order, addressing the long-term growth while improving the quality of programs must be a top priority. Putting meaningful work requirements in the welfare code would promote both fiscal responsibility and independence.
• Real liquor privatization. Privatizing alcohol sales would not only increase revenue, but reduce PLCB costs.
• Reducing other corporate welfare programs, such as subsidies for horse racing and politically-selected tax breaks.

In three years under Gov. Wolf, GF spending has grown by $2.9 billion. That’s more than in than in the prior eight years combined.

Pennsylvania ended the 2016-17 fiscal year with a $1.6 billion deficit. Why? The spending increase in 2016-17 alone was $1.8 billion.

We don’t have a revenue problem, we have a spending problem.

Lawmakers face a choice: They can repeat the mistakes of the past, and follow the lead of states like Illinois and New Jersey into insolvency. Or they can adopt fundamental reforms to address our long-term fiscal crisis, and improve our stagnant economy.