Balancing Pennsylvania’s Budget: Tax or Reform?

Government unions are rallying in Harrisburg, demanding more money from Pennsylvanians to justify an even larger state budget. It’s worth asking, how did we get here again? And what are we going to do now?

Taxes aren't paid by corporations, they're paid by Pennsylvanians through lower wages, fewer job opportunities and even layoffs.

Year after year, the call for higher taxes reverberates the Capitol steps, especially calls for a natural gas severance tax. However, far from a “fair share,” the severance tax would add to every other business tax and impact fee these job-stimulating companies pay. The IFO estimates the current impact fee is equivalent to a 6.9% severance tax—higher than severance taxes in Louisiana, Wyoming, and West Virginia.

In reality, taxes aren't paid by corporations, they're paid by Pennsylvanians through lower wages, fewer job opportunities and even layoffs. A severance tax would stifle economic growth and spike energy bills.

Before accepting the mantra of increased spending on “big business,” it’s worth noting that government union leaders far surpassed the political spending of the natural gas industry by a 15 to 1 ratio in 2015-16. That includes $9.8 million taken from their members’ dues and used to advocate for policies that weaken the economy.

The real cause of our $1.6 billion deficit isn't tax breaks for corporations, it's structural overspending and economy-killing taxes.

The Commonwealth already has the 15th highest state and local tax burden in the nation and the 2nd highest corporate income tax in the industrialized world. In return, we’ve suffered years of stagnation. From 1991-2015, Pennsylvania has ranked 46th in job growth and 45th in personal income growth, and our population is declining.

As Nate points out, Pennsylvania’s lawmakers and Gov. Wolf can perpetuate this unsustainable trend. Or, they can choose meaningful and commonsense reform. Reducing corporate handouts to multi-million dollar companies, privatizing the liquor system, welfare work requirements and re-prioritizing off-budget funds are just a few options that will propel Pennsylvania toward greater prosperity.

A severance tax can’t fix our sluggish economy or close our deficit. Innovative, responsible choices exist to balance the budget and spur job creation. Urge your legislator to choose smart reforms over job-killing tax hikes.