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GOP-Trump Tax Plan: A Windfall for Top 1% of Pennsylvania, a Tax Increase for Many Middle-Class Pennsylvanians

  By Federal Taxes, Pennsylvania, Taxation, Uncategorized

  A 50-state analysis of the GOP tax framework reveals that in Pennsylvania, the top 1 percent of taxpayers would receive a substantial tax cut worth $67,970 while many upper-middle-class Pennsylvanians would face a tax increase. This plan is bad for Pennsylvania and our country. At a time when incomes are rising for the very rich and relatively stagnant for everyone else, a plan that lavishes tax breaks on the top 1 percent, and pays for it in part by taxing others, should not be the starting point of our tax reform debate. The Washington-based Institute on Taxation and Economic Policy released the 50-state numbers today. While GOP leaders have pitched the plan as a tax cut for the middle class, the analysis shows that this is not true for the nation as a whole or for Pennsylvania. While most Pennsylvanians would receive a modest tax cut, on average that cut… Continue reading

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No Time For Giving Up

  By Pennsylvania, Pennsylvania State Taxes, Philadelphia, Philadelphia Taxes, Taxation

Update noon, October 18: There is talk around the Capitol that a shale tax will come out of the House Finance Committee today and coming to a vote on the House floor later this week. This legislation must be part of the budget this year. It is the difference between a budget that takes a step forward to address our long-term budget problems and one that makes those problems worse. Marc Stier, director of the Pennsylvania Budget and Policy Center, released the following statement on the revenue plan passed by the Pennsylvania House of Representative last night: “The tax code bill passed by the Pennsylvania House of Representatives last night is a white flag raised by the leaders of both parties, who are evidently willing to surrender to another year of make-believe budgeting rather than fight for a solution to the state’s persistent budget shortfalls. “A shale tax, which would… Continue reading

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Don’t Let the Extremists Win

  By Pennsylvania, Pennsylvania State Taxes, Taxation

There are lots of rumors about a budget deal flying around Harrisburg but few details and even less assurance that votes will be found to approve in the House and the Senate. What little we hear is concerning. And the best way to understand our concerns is to look again at why we have not reached a deal until this point—extremists control the Republican Party in the House. There is a broad agreement among Democrats and most Republicans that Pennsylvania has a structural budget deficit (which simply means that year after year revenues will not pay for state expenditures, either those approved by the General Assembly this year or those demanded by Pennsylvania voters). There is broad agreement among Democrats and most Republicans that we need new tax revenues to close the deficit this year and in the future. And there is broad agreement that a severance tax should be… Continue reading

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The GOP Federal Tax Proposal: Multiple Reasons to Worry

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania, Taxation

The outline of the tax proposal released by President Trump and Republican House and Senate leaders should worry all Pennsylvanians for multiple reasons. First, the plan calls for adding $1.5 trillion to the deficit over the next ten years. This is remarkably hypocritical, given that Republicans blamed President Obama for deficits even as they declined year after year after the end of the Great Recession. And it is economically risky at a time when the economy is growing. Republicans claim that tax cuts will generate much faster economic growth. This is unbelievable, given the record of previous huge tax cuts during times of economic growth. And, of course, most professional economists, on both the Left and Right, do not believe it at all. Second, the likely result of added deficits will be new pressure to cut federal spending to balance those deficits, with most of those cuts coming from health… Continue reading

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Graham-Cassidy Repeal Bill — Just Plain Bad for Pennsylvania

  By ACA, PA Budget and Policy Center, PBPC Blog posts, US

As I write this, it is possible that the Graham-Cassidy bill to repeal the Affordable Care Act and make major changes to the traditional Medicaid program is already dying or dead. Two Republican members of the Senate, McCain of Arizona and Paul of Kentucky, have said they will vote against it. Senator Collins of Maine has announced that she is leaning against it. I’m hopeful that Senator Murkowski of Alaska will all announce that she is against it.  And when that happens, I expect a substantial group of Senators will join them because this bill is truly dangerous to every state and the only reason it is even being considered is that Senate Republicans fear the short-term political costs of disappointing their base voters and funders more than they fear the long-term costs of doing great harm to their constituents. Once it is clear that there is no path forward… Continue reading

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What the PA Credit Downgrade Means

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

The decision by Standard & Poor’s to downgrade Pennsylvania’s credit rating should come as no surprise. There was ample warning by S&P and other credit agencies, as well as by political observers including us at PBPC, that this would be the result of the continuing failure of Republicans in the General Assembly, and especially Speaker Turzai and his followers in the House, to raise sufficient recurring revenues to close state’s long-term structural deficit.   Instead, year after year, budgets passed with Republican majorities have been balanced with one-year revenues, phantom funds, and other budgetary gimmicks. This year, even as the sword of a credit downgrade was hanging over the heads of the taxpayers of the state who will bear the burden of the increased taxes at every level of government from school districts and municipalities to counties to the entire state, Speaker Turzai ignored the danger. Even when a bipartisan… Continue reading

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On the Passage of the PA House GOP Revenue Plan

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

HARRISBURG – Marc Stier, director of the PA Budget and Policy Center, made the following statement on the passage of the House GOP revenue plan: “After a long debate that was mainly remarkable for the failure of House Republicans to adequately explain or defend their proposal to transfer $600 million from special funds into the General Fund, the Pennsylvania House of Representative enacted a revenue plan that (1) includes zero recurring revenues, which means that the next fiscal year will begin with a deficit of over $1 billion, (2) is fundamentally unbalanced in that it includes many proposals that are unlikely to raise the revenues expected, including proposals that have been included in previous budgets but have never gone into effect, and (3) is a stealth cut in government spending on critical programs in public transportation, public safety, environmental protection and agriculture, small business, economic development, and other areas that… Continue reading

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Budgets and Balances: The PA House GOP Budget Plan to Raid Special Funds Explained

  By Pennsylvania, Pennsylvania Budget

The Pennsylvania House Republican plan to balance the budget in part by raiding other state funds is something of a moving target. A new amendment Representative Moul (A03286) to House Bill 593 is the legislative vehicle in which elements of the plan will move to the floor of the House as early as today. We want to take a step back and put the whole plan to use supposedly “surplus” money that is “sitting around doing nothing” into perspective. This plan rests on a fundamental confusion between bank balances and budgets, one that has played a role in the life of most married couples once or twice. And perhaps the easiest way to understand it is to consider a scenario not unfamiliar to most of us. One partner — I’m going to make him the husband in this version but it doesn’t have to be — picks up a flyer from… Continue reading

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Where the Budget Stands

  By Budget, PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget

As legislators return to Harrisburg after a far too long vacation, it’s time to take stock of the state of the unfinished budget. In early July, the General Assembly enacted a budget that took many step forwards. It provided new funding for child care and pre-K education, for K-12 education, for the Pennsylvania System of Higher Education; for those who are intellectually disabled and face long waiting lists to get services; and for those for those who suffer from opioid addiction and mental illness. Yet, as of today, the General Assembly has not managed to pass a funding plan to pay either the budget for the current year, which remains about $900 million underfunded, or for the deficit of $1.5 billion accumulated last year. Weeks went by after the appropriations bill was passed with no action, but finally the Senate took a step forward. With strong bipartisan support it passed… Continue reading

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On the PA House GOP Budget Plan to Raid Special Funds

  By Budget, Memos, PA Budget and Policy Center, Pennsylvania Budget

This press memo, released on September 5, 2017, details how the budget plan released by a group of Republican House members fails in the most important task before our state today: to resolve the long-term structural imbalance between expenditures and revenues. MEMO To: Editorial Page Editors, Editorial Board Members, Columnists, and Other Interested Parties From: Marc Stier, Director, Pennsylvania Budget and Policy Center Date: September 5, 2017 Re: On the PA House GOP Budget Plan to Raid Special Funds The budget plan released today by a group of Republican House members fails in the most important task before our state today: to resolve the long-term structural imbalance between expenditures and revenues. Even if every fund transfer proposed by the Republican back-benchers today were constitutional and legal, and even if they had no impact on the commitments made by the General Assembly to provide funding for public purposes, this one-time transfer will provide almost no… Continue reading