Category: Public Policy

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Time to fix our upside-down tax system

  By Pennsylvania State Taxes, Published Op-Eds, Taxation

Originally published by the York Dispatch, December 23, 2016 Pennsylvania has been struggling with persistent budget deficits since the start of the Great Recession in 2008. And we at the Pennsylvania Budget and Policy Center have been recommending a “balanced approach” to resolving the deficit from the beginning, one that combines restraint in spending with new revenues. But since 2010, under Gov. Tom Corbett and Gov. Tom Wolf, the General Assembly has adopted an unbalanced approach. Spending has gone down but revenues have gone down faster. From 1994 to 2011, under both Democratic and Republican governors, the state spent 4.7 percent of the state’s GDP. During the Corbett years, that fell to 4.3 percent as spending on education and human services were sharply cut. And while, thanks to Wolf, the state has been able to restore some of those cuts, spending in the last two years remains at the same level as… Continue reading

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The rich can take the hit–to fix the budget they should pay their fair share.

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes, Published Op-Eds

Marc Stier | 01/17/2017 Blog This piece originally appeared on Pennlive, December 23, 2016. You remember how Lucille Ball would work her way into some kind of predicament and then look around and wonder how she got there? That’s how our state legislators seem to look at the budget deficit we are stuck with right now. They are looking around wondering how the current Pennsylvania budget deficit, which approaches $3 billion for this year and next year together, happened. But it didn’t just happen. It was the product of a series of long-term and short-term decisions made by legislators, sometimes with the help of our governors. Let’s start, however, with what did not cause the budget deficit, because too many of our legislators, like Lucy, want to blame someone else for the mess they have made. Growth in state spending is not the cause of budget deficits. From 1994 to… Continue reading

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Broad and Narrow Taxes

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

Last week, just as we were putting out our paper on how to raise revenues without raising taxes on working people and the middle class, Governor Wolf announced that he would not call for raising broad-based taxes, particularly the personal income tax and sales tax, in the budget proposal he puts forward in February. And, of course, the Governor’s statement echoes what the Republican leaders of the General Assembly have been saying as well.   A friend asked me if I were disappointed by these announcements. I quickly responded, “not at all.”  Most of our tax plan is precisely designed NOT to require increases in broad based taxes. Indeed, the core of our proposal—a new tax on income from wealth—targets families in the top 5%, and even more the top 1%, of incomes. Sixty-seven percent of new revenues would come from top 5%. Middle- and low- income families would pay very… Continue reading

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The Budget Our Democracy Deserves

  By Fair Share Tax, PA Budget and Policy Center, PBPC Blog posts, Taxation

Many of the ideas in this post are components of PBPC’s recently-released “Fair Share Tax Proposal for Pennsylvania.” The recent political talk about Pennsylvania is focused on the latest in a series of fiscal crises. But lurking in the background is a larger crisis—a crisis of democracy in Pennsylvania. The deficit approaches $3 billion for this year and next year combined. Yet the solutions that one would think were most obvious in a putative democracy are not the ones the leaders of our General Assembly seem inclined to support. We are never going to solve our budget crises in Pennsylvania if we don’t fix our upside-down tax system. Pennsylvania is one of what the Institute on Tax and Economic Policy calls the “terrible ten” states when it comes to tax fairness. We tax those with high incomes at a far lower proportion than those with low incomes. State and local… Continue reading

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New Report: How To Raise Revenues While Sparing Most Pennsylvanians

  By John Neurohr, PA Budget and Policy Center, PBPC Blog posts, Presentation, Taxation

In the wake of Budget Secretary Randy Albright’s mid-year budget briefing and the news that the Pennsylvania budget for 2016-17 will have a deficit of $600 million, the Pennsylvania Budget and Policy Center today released a new, comprehensive revenue proposal to address the looming deficit for FY 2017-18, which when combined with the deficit for this fiscal year, could approach $3 billion. The new report,  How to Raise Revenues While Sparing Most Pennsylvanians,” can be read in full here. While the current year deficit is a problem for the state, unfortunately it is not the biggest budget problem we face. The Independent Fiscal Office is projecting a 2017-18 deficit of $1.7 billion, which does not include the ongoing costs of higher human service caseloads which might add $300 million or more to the total. One barrier to raising revenues is the reluctance of legislators on both sides of the aisle to… Continue reading

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The Fair Share Tax to Support Public Investment in Pennsylvania

  By Fair Share Tax, PA Budget and Policy Center, Policy reports, Taxation

This paper puts forward a plan, which we call the Fair Share Tax, that would take a major step toward fixing Pennsylvania’s broken tax system and raise the revenues we need to invest in the public goods that are critical to creating thriving communities and individual opportunity in our state: education, infrastructure, protection for our air and water, and human services. Click here to print or read full screen. Continue reading

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Combine spending restraint with new revenue

  By PA Budget and Policy Center, Pennsylvania Budget, Pennsylvania State Taxes, Published Op-Eds, Taxation

This piece originally appeared in the Erie Times-News, December 28, 2016. Pennsylvania has been struggling with persistent budget deficits since the start of the Great Recession in 2008. And we at the Pennsylvania Budget and Policy Center have been recommending a “balanced approach” to resolving the deficit from the beginning, one that combines restraint in spending with new revenues. But since 2010, under Govs. Tom Corbett and Tom Wolf, the General Assembly has adopted an unbalanced approach. Spending has gone down but revenues have gone down faster. From 1994 to 2011, under both Democratic and Republican governors, the state spent 4.7 percent of the state’s gross domestic product. During the Corbett years that fell to 4.3 percent as spending on education and human services were sharply cut. And while, thanks to Wolf, the state has been able to restore some of those cuts, spending in the last two years remains… Continue reading

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Limitations on the State and Local Tax Deduction Hurt Pennsylvania in Two Ways

  By Federal Taxes, PA Budget and Policy Center, PBPC Blog posts, Resisting Trump, Taxation, US

A major issue in the debate over the Republican tax cut bill is whether the deduction for state and local taxes (the SALT deduction) should be eliminated or reduced. The conference committee bill released on Friday proposes a “compromise” that would allow individuals to deduct up to $10,000 in some combination of state and local property and income or sales taxes. That compromise is deeply problematic for Pennsylvania and many Pennsylvanians, in two different ways. First, substantial numbers of upper middle-class Pennsylvanians will see their taxes go up as a result of the limitation on state and local tax deductions in the conference committee bill. These taxpayers are likely to be concentrated in the suburbs of Philadelphia, where a high percentage of taxpayers take the state and local deduction. Second, the state as a whole will suffer because the limitation on the state and local tax deduction will make it… Continue reading

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On The Mid-Year Budget Briefing: The Full Picture Is Even More Grim

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

Budget Secretary Randy Albright’s mid-year budget briefing this week brings worrisome news that, at its current level of expenditure and revenues, the Pennsylvania budget for the 2016-17 will have a deficit of $600 million. Part of that deficit is the result of lower tax revenues than were projected when the budget was enacted in July. Another part is higher human service caseloads, which will require a supplemental appropriation.   The projected deficit might increase again if the General Assembly does not enact legislation to bring in $100 million in internet gaming revenues and if a second Philadelphia casino license is not sold for $50 million. While the current year deficit is a problem for the state, unfortunately it is not the biggest budget problem we face. The Independent Fiscal Office is projecting a 2017-18 deficit of $1.7 billion, which does not include the ongoing costs of higher human service caseloads… Continue reading

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Statement On The Inaction by State Senate to Fund Unemployment Compensation Call Center

  By Statements, Unemployment Insurance

Pennsylvania Budget and Policy Center Director Marc Stier made the following statement after the state Senate failed to vote for additional funding for the Department of Labor and Industry’s unemployment compensation call centers during its only scheduled post-election session day: “If you have received unemployment insurance or know anyone who has, you know how important it is for people to receive help in navigating a complicated system, particularly at a difficult time in their lives. Too often, the phone lines to the call centers where help can be found are busy. And that often means that recently-unemployed people cannot secure the help they need in claiming the benefits to which they are entitled, and which have been paid for in part by their own taxes. “This has long been a serious problem in Pennsylvania. Recent additions to funding from the federal and state governments have helped reduce it. But yesterday,… Continue reading