A Way Out of Budget Gridlock

Note: This commentary was published in The Philadelphia Inquirer.

“How much longer?” That’s a question Philadelphia parents stuck in traffic on the way to the Jersey Shore know all too well. Unfortunately, it’s also a question Pennsylvanians will ask for the foreseeable future, as the state budget impasse hits its sixth week—with no end in sight. 

Considering Pennsylvania taxpayers fork over an average of $4,374 per person in state and local taxes each year—the 10th highest tax burden in the nation—it’s no wonder there’s frustration when Harrisburg can’t seem to get its fiscal house in order.

Although Gov. Wolf vetoed the legislature’s no-tax-hike budget, Pennsylvanians don’t get to stop paying taxes—not even close. Some services Pennsylvanians count on simply won’t be funded. That’s like gym members paying full membership fees while the pool and basketball court are closed for renovations.     

With budget traffic at a standstill, how do we press through the roadblock to a resolution that benefits all Pennsylvanians?

One possibility is a bill introduced by Rep. Dan Truitt to ensure important government services remain open during the impasse. Separate legislation sponsored by Sen. Ryan Aument and Rep. Dave Hickernell would ensure school districts receive funding if summer break ends before the stalemate.

While these measures are temporary, they would alleviate the pain of the government shutdown during negotiations. And they would prevent politicians from holding voters hostage with shutdown threats to force action on bad policy that could have long-term consequences.

Beyond stop-gap legislation, certain items can be separated from the budget debate to help end the gridlock—namely, sales, income, and property taxes.

The lion’s share of Wolf’s $4.6 billion tax increase—which is larger than all other 49 states combined—relies on sales and income taxes that would impact families at every income level. Despite Wolf’s focus on a new severance tax during his “Schools That Teach” tour, it’s just a sliver—3 percent—of his total tax plan.

Unfortunately, Gov. Wolf’s spokesperson has said there have “not been any better ideas presented” than his tax increases. That’s like telling Philadelphia drivers stuck in Jersey shore traffic there’s no better way home than through Canada.

The spokesperson also said homeowners need property tax relief “now.” But Wolf’s ‘relief’—which returns just 30 cents of every dollar in new taxes to property owners—wouldn’t start until October 2016.

There is bipartisan support, as well as bipartisan opposition, to alternative plans to shift from property taxes to higher sales and income taxes. In contrast, there were no votes among either Republicans or Democrats for Wolf’s tax plan—which would tax things like nursing home care, day care, and funerals.

Separating this most controversial portion of Wolf’s plan—sales and income tax increase—from the budget debate would pave the way for serious discussion where there is some room for compromise.

Despite appearances, Wolf and the legislature have more in common than not when it comes to spending priorities. The budget Gov. Wolf vetoed in toto increased funding for education and contained many of his own proposals. Legislative leaders note 274 of the approximately 400 line-item appropriations were the same or even more than in Wolf’s proposed budget.

Implementing stop-gap funding measures and delaying debate on issues not critical to the current budget debate would help ease the gridlock and protect Pennsylvanians from hasty policy decisions that stem from budget road rage but end up costing hardworking families.

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Matthew J. Brouillette is president and CEO of the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.