News Release: Don’t Hike Taxes—Examine Priorities in $3 Billion Off-Budget Spending

State lawmakers scrambling for revenue sources to balance their $32 billion spending plan are faced with a choice: higher taxes or real reform.

The decision should be easy.

Pennsylvanians already face the 15th-highest state and local tax burden in the nation. Meanwhile, Commonwealth Foundation’s newest analysis identifies $3 billion in “shadow budget” spending—essentially “off-book” spending outside the state’s General Fund—that’s ripe for reform.

Included in this is $250 million in the Race Horse Development Fund—paid for by assessments on casino slot revenue. Initially sold as a way to lower Pennsylvanians’ property tax bills, these slot taxes have been used to prop up the struggling horse race industry and pay out cushy prizes to race winners. $2.7 billion has been transferred to the fund since 2006.

“Right now, lawmakers are considering taking even more money from hardworking Pennsylvanians, with possibilities on the table including a $200 million tax on alcohol and a $125 million tax on electricity,” commented Bob Dick, senior policy analyst with the Commonwealth Foundation. “Meanwhile, hiding in the shadow budget is more than $3 billion in unexamined spending.

“Prioritizing unfair subsidies to politically favored interests over the budgets of Pennsylvania families is without excuse. Before charging one more penny for drinks or raising the cost of energy, lawmakers must ensure every dollar spent is spent wisely.”

Bob Dick and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or [email protected] to schedule an interview.

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