When is half less than zero? When it’s the Pennsylvania state budget.
Pennsylvania’s annual budget is due every year before the next budget cycle starts on July 1. Gov. Wolf, as in earlier years, started the 2017-18 budget process in February. The General Assembly didn’t pass the spending plan until June 30th.
But a budget is two parts: spending and revenues. Every budget – whether it’s the state’s or the entire country’s or your household’s – must have a plan for dollars to come in to cover what goes out. In this case, the community investments and services that make up a working government.
Advocates like those in the Pennsylvania’s Choice coalition (of which Just Harvest is a member) have mounted a vigorous campaign over the past few years for a fair budget. We have made clear that legislators can’t keep cutting what the state spends so they can keep giving tax breaks to corporations. They must do their jobs: protect and strengthen all Pennsylvanians, and grow our shrinking resources.
Ready to take action? Scroll down to see how.
Budget deadlock
Republican leaders in the Pa. Senate and House have still not agreed to what many of their colleagues and advocates are calling for as a revenue plan. It has long been painfully obvious what’s needed: a tax on natural gas drilling (a “severance” tax) like every other state has, closing corporate tax loopholes, and a Fair Share tax plan that cuts taxes for 60% of low- and middle-income Pennsylvanians while raising it on wealth.
Said Pennsylvania Budget and Policy director Marc Stier,
We are concerned by the continued unwillingness of the leadership of the General Assembly to support new recurring revenues that do not fall heavily on working people and the middle class and by the prospect that the structural budget deficit will be papered over — but not closed — by huge new borrowing. The only thing that will keep the burden of funding the needs of today’s Pennsylvania off our children and grandchildren is long-term, sustainable sources of revenue.”
Republican legislative leaders’ consistent failure to do that over the past several decades (with help from the occasional Republican governor) is why Pennsylvania is now ranked the 9th worst-run state in the nation. It’s also why Gov. Wolf refused this year, like last, to sign the irresponsible budget General Assembly sent him. (Under law, it goes into effect anyway.)
No money, more problems
The current 2017-18 budget doesn’t address the state’s plummeting funds. It doesn’t come close to the necessary investments Pennsylvania needs to make in its schools, in child care and pre-K, and in our environment, job development, and human services.
It at least has some extra money for some of these items, no huge cuts, and a significant new outlay (thanks to Gov. Wolf) to support access to school breakfast among Pennsylvania’s hungry children. But it has no way to pay for any of its spending plans.
What would be a great source of revenue? A tax on Marcellus Shale gas drillers or “severance” tax. Having never put one in place, “Hundreds of millions – if not billions – of dollars of much-needed revenue have been lost to the state and its residents since drilling began 14 years ago.”
So Pa. House Speaker Mike Turzai (R-Allegheny County) sent state representatives home for an extended “weekend” on Wednesday of last week, in fear of their passing a severance tax. Blocking that tax has been one of Turzai’s top priorities for years, thanks to industry donations.
What’s their plan?
So what do Turzai and most of his Republican House colleagues propose as a way to make up the huge revenue gap? A gap that will grow to $3 billion without a real plan for revenues?
Reducing spending on Medicaid, they claim. (As well as borrowing the money and some other equally lousy ideas.)
In order to slash Medicaid they quickly rammed through HB 59*, despite all House Democrats and 15 House Republicans voting against it. Among other things, the bill would require:
- all able-bodied Medicaid recipients to be meet work or job search requirements; and
- some financial contribution from families with incomes exceeding $264,000 towards the cost of care of their disabled children.
Pennsylvania’s Medicaid rules are part of the Human Services Code, which the legislature has to review every year as part of the budget process. So these changes would have to be part of the ongoing budget negotiations.
There are several reasons why both of these changes are terrible ideas. In short, we need real, sustainable sources of revenue. Turzai would rather find revenue by trying to squeeze money out of Medicaid recipients, who are overwhelmingly children, people with disabilities, seniors in nursing homes, and families with disabled children.
What should come next
Pennsylvania is still the only major gas-producing state that does not have a tax on natural gas drillers. In the last few days, a bipartisan group of legislators is making a renewed effort to create one.
Representative Kate Harper (R-Montgomery County) has introduced a drilling tax plan with bipartisan support that would raise over $400 million in 2017-18. But Republican House leader Mike Turzai has been unwilling to allow such a vote.
Jul. 27 update: the state Senate has passed a bipartisan bill to fully fund the budget, in part through a new tax on gas drillers and changes to the tax code. Unfortunately, the drilling tax is too low, unfairly structured, and may weaken environmental protections. And the tax code changes maintain Pennsylvania’s upside down tax system. They are an increased tax on the earnings of natural gas, electricity, and cell phone companies, who will likely pass those costs on to their customers, hitting low-income families hardest. But this revenue bill allows Pennsylvania to avoid cuts to social programs, and these compromises are likely the best our Democratic leaders can do this year.
Turzai is still refusing to negotiate with his Republican colleagues in the Senate, any Democratic legislators, or the governor. Holding the budget hostage (including funding for PA’s four state-related universities) will stop cash-flow and down-grade the state’s credit rating. This could force Gov. Wolf to have to cut government programs to balance the budget.
HOW YOU CAN TAKE ACTION
We need to tell our state legislators that the right way to balance the budget is to enact a tax on natural gas drillers, not attack people on Medicaid.
Pennsylvania Budget and Policy Center (PBPC) has set up an easy online tool to quickly to sign a petition to Rep. Turzai and to send letters to your state legislators.
Click here to urge your state Representative to fight for a tax on natural gas drillers.
Click here to tell your state Senator why it makes no sense to ask households on Medicaid to foot the budget bill. Jul. 27 update: the bill that makes it harder for low-income working people to receive Medicaid has passed the state Senate. We now need to keep the House from passing the revised Senate version, and if they do, for the governor to veto it. Click here to send a letter to your state House Rep. and to Gov. Wolf to vote NO on HB 59.
Even bettter? Call them. You can use these talking points:
- Why your Representative should support a severance tax (from PBPC). Tell their office that you want your rep. to insist that Speaker Turzai allow a vote on the natural gas drillers tax, and that you want your rep. to vote for it when it reaches the House floor.
- Why your Senator should oppose HB 59 (from PBPC). Tell their office you want your senator to oppose closing the budget gap by cutting state funding for Medicaid, and to vote against it in committee if possible and when it reaches the Senate floor.
*The sneak attack method Republican legislators used to pass HB 59 – fast-tracking the bill as part of the budget process for a midnight vote – is exactly what Republican leaders did in 2012 to get rid of Pennsylvania’s general cash assistance program for low-income childless adults.
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