State Budget Facts vs. Fiction
7/31/2015
One month has passed since Gov. Tom Wolf vetoed the state budget. The goal should be to enact a budget built upon fact versus one built on the propaganda being circulated by the governor and special interest groups from Washington, D.C.

Gov. Wolf and his followers have subscribed to the old saying, “if you repeat a lie often enough, it becomes the truth.” They desperately cling to the assertion that the state has “cut” $1 billion in education funding in the 2011-12 budget.

The truth is Federal American Recovery and Reinvestment Act funding, more commonly known as stimulus funding, brought a temporary infusion of federal tax dollars, of which the Rendell Administration earmarked $1.095 billion to replace state funding withdrawn from education and spent elsewhere to balance the 2010-11 budget. In fact, beginning with the 2011-12 state budget and every year since, record amounts of state funds have been appropriated for education. The budget Gov. Wolf vetoed contained a new record high of $10.6 billion.

The governor has vowed to implement a severance tax on Marcellus Shale “modeled after the severance tax in neighboring West Virginia” (2015-16 Budget in Brief, pg. 14). Matthew Knittel, director of the Independent Fiscal Office, testified before the Senate Finance and Environmental Resources and Energy committees that the effective tax rate (ETR) of the governor’s proposed severance tax “exceeds West Virginia by 2.3 percentage points” and that an interstate comparison of effective severance tax rates of six large natural gas producing states “the proposed severance tax yields the highest ETR.”

If enacted, the governor’s proposal would essentially serve as a de-facto moratorium on Marcellus gas development and negatively impact the natural gas and ancillary industries that employ thousands of Pennsylvanians. A severance tax would fail to meet the governor’s revenue expectations and cause reductions in Personal Income and Sales and Use Tax collections as thousands of Pennsylvanian workers are laid off due to the effects of low gas prices and the Wolf severance tax.

On June 30, the governor was presented a budget which contained funding for 274 of 401 items at or above his executive budget proposal. Instead of signing the budget and continuing the dialogue with the General Assembly, the governor vetoed the entire budget, insisting on massive tax increases that will hurt Pennsylvanians across all income levels. Please call Governor Wolf at (717)787-2500, and tell him to stop campaigning and govern by returning to Harrisburg and working with the Legislature to enact a balanced budget that doesn’t increase taxes.

Representative Fred Keller
85th District
Pennsylvania House of Representatives

www.RepFredKeller.com  
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