With no clear path to a balanced budget, lawmakers have suggested resurrecting the long-dead natural gas receipts tax in order to pay for this year's $32 billion budget.
Sound familiar? Almost one year ago lawmakers floated this tax on home-heating after they agreed to a five percent increase in spending before identifying revenues.
A natural gas gross receipts tax appears to tax large companies (natural gas distributors), but it is functionally a broad-based tax on consumers to raise an estimated $500 million this fiscal year. The tax is also regressive, hitting low-income earners the hardest. It’s little wonder economists agree it belongs “in the dustbin of tax history.”
The natural gas gross receipts tax was eliminated 17 years ago. Reinstating it would spike the home heating bills of about 2.7 million households (roughly half of all households in the state). About 190,000 businesses also use natural gas.
This sure sounds like a broad-based tax, the kind of tax hike Governor Wolf and GOP leaders weren't interested in last month.
The random list of the services and products subject to a gross receipts tax shows it’s nothing more than a revenue grab. Taxpayers deserve more from Harrisburg than a last minute ploy to impose broad-based tax hikes.
Instead of scrambling for a politically palatable way to force Pennsylvanians to pay for unsustainable government spending, leaders should focus on eliminating horse-racing subsidies, welfare reform, liquor privatization and reprioritizing spending in the shadow budget.
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