News Release: Senate’s Broad-Based Tax Hikes Should Be Rejected by House

In an effort to close a budget gap created by their own overspending,  Senate lawmakers today passed a series of broad-based tax hikes that will hit nearly every Pennsylvania family and job creator.

Under the Senate’s $2.2 billion revenue plan, Pennsylvanians would pay a higher tax on cell phone service, home-heating bills, electricity, and some online purchases made through vendors such as Amazon and eBay. The Senate’s $571.5 million tax hike would cost a family of four nearly $180 dollars in higher taxes.

A new natural gas gross receipts tax makes up the lion’s share of the increase. Half of Pennsylvania households will pay this tax on their home heating bills. Additionally, the Senate piled a natural gas severance tax on top of the impact tax drillers already pay.

“Lawmakers’ first mistake was passing an unconstitutional, unbalanced spending plan that far exceeds available revenue—for the second year in a row,” commented Nathan Benefield, vice president and COO for the Commonwealth Foundation. “Gov. Wolf then abdicated his legal responsibilities by letting an unbalanced budget become law.

“Now, adding insult to injury, Senate lawmakers rejected tangible solutions to balance the budget without tax increases—such as redirecting lavish corporate welfare handouts and letting private stores sell liquor—and instead hit Pennsylvanians with broad-based tax increases. This is the opposite of responsible governing.”

Contrary to some policymakers’ claims that they have shielded Pennsylvanians from tax hikes for years, state government has raised taxes four times in the past eight years, totaling $4 billion. Indeed, last year’s $650 million tax increase—also sold as a way to balance an unconstitutional, unbalanced budget—crushed nearly 100 vape shops.

“We can’t keep repeating the failed mistakes of the past,” Benefield continued. “Multiple tax hikes have not addressed the real problem, which is frivolous overspending. You can’t claim government is ‘cut to the bone,’ while politically connected special interests siphon $800 million in corporate welfare from taxpayers every year. While raising home heating bills for half of Pennsylvania households, the Senate left in place the horse-racing industry’s $250 million in public subsidies.”

“As this harmful bill moves to the House, we urge lawmakers to stand up for Pennsylvania families and job creators, reject these broad-based tax hikes, and implement responsible solutions.”

Nathan Benefield 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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