Will Lawmakers Renege on ‘No Broad-Based Taxes’ Pledge?

Natural Gas Gross Receipts Tax Would Hit 2.7 Million Homeowners

July 6, 2016, HARRISBURG, Pa.—As lawmakers scramble to find revenue to fund the $1.6 billion spending increase they passed last week, a broad-based tax increase, once deemed “off the table,” is in play.

In addition to a tobacco tax increase, lawmakers may resurrect a natural gas gross receipts tax, that would ultimately be paid by 2.7 million homeowners who heat their homes with natural gas. Ironically, this broad-based tax proposal—slated to raise up to $500 million annually—comes just weeks after Gov. Wolf agreed that broad-based taxes were unnecessary.

“Old taxes must die hard,” commented Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation. “Lawmakers specifically killed this tax in 2000 to improve consumers’ options in home-heating. Now, they want to revive it to pay for their unfunded spending plan. What other dead taxes will they try to resurrect next?”

While gross receipts taxes appear to be a tax on large companies, they are in reality a tax on consumers. Like sales taxes, they particularly target low-income earners, and economists agree they belong “in the dustbin of tax history.”

“Reviving this tax would unfairly hit families, seniors, low-income households, and small businesses with higher heating bills for years to come in a mad dash to cover Harrisburg’s spending addiction,” Stelle continued. “Taxpayers deserve more from lawmakers than a last-minute ploy to impose broad-based tax hikes.”

Elizabeth Stelle and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or gld@commonwealthfoundation.org to schedule an interview.

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