Intelligencer Journal/Lancaster New Era
Is it a tax or isn't it?
Gov. Tom Corbett says he does not believe that applying the oil company franchise fee rate to the full wholesale price of gas -- it now applies to less than half of the price -- will be passed along to consumers. That means it can't be fairly called a tax hike, he says.
Americans for Tax Reform authored the no-new-net-taxes pledge Corbett signed in 2010 to neutralize GOP conservative critics after he said tax hikes were "on the table," at an early campaign event.
ATR says Corbett's forthcoming plan to lift the cap on the oil company franchise tax, to produce $1.9 billion in new revenue, is a tax hike.
Patrick M. Gleason of ATR, who monitors state issues for the group, founded by Grover Norquist, responded to Corbett's assertion that it would not be passed along to consumers by emailing: "It's a clear tax increase whose burden will be borne by consumers, not companies."
The point of the cap-lifting is to raise more than $1.85 billion in several stages over a couple of years, while the state gets projects shovel-ready. No offsetting tax cuts are planned to accompany the cap-lifting, state officials confirmed.
Said Gleason: "Unless offset, it is a blatant violation of the pledge that he made to Pennsylvania taxpayers. "
Corbett spokesman Kevin Harley said there was no public statement by the administration or any of its officials confirming the governor would lift the cap as has been widely reported.
But administration officials familiar with the governor's plan confirmed it to Capitolwire.
The ATR argument is simple: Even the state Department of Transportation says if the cap is lifted to cover the full wholesale price of gas, the state will get $1.85 billion -- in taxes.
So if it produces more tax revenue, nearly $2 billion more, then you can see why ATR considers it a tax hike. Gov. Ed Rendell, back in 2011, said he would have supported lifting the cap if the Legislature had ever been willing to do so during his tenure. PennDOT Secretary Barry Schoch said Rendell supported it until GOP legislative leaders supported it, then backed away, a charge Rendell disputes.
Rendell said he would have supported it at any point, because it would be passed along less than a motor fuels tax hike or a fee increase, but it would absolutely be a tax hike.
As for this being a tax increase, Gleason said: "Unfortunately, it wouldn't be the first time."
According to the ATR archive, this would be third Corbett tax hike ATR said violates the pledge they wrote and Corbett signed.
The first was the state's efforts to ensure that residents have to turn in sales tax that out-of-state Internet vendors did not collect from them. The Corbett folks replied the taxes were due, and Corbett has always said it was his plan to collect all taxes that are due.
The second was last year's Marcellus Shale impact fee, which ATR described as a tax hike, and urged lawmakers to vote against it. Corbett and GOP lawmakers said it was a fee to ameliorate the direct and indirect impacts of more gas drilling, not a tax.
But to ATR, this is the third break of the pledge, if the proposal remains unchanged.
Which has Democrats salivating. This promise not to raise taxes is a core Corbett issue, one the public identifies with Corbett, and one that has the potential to make voters question whether he keeps his word.
The line Democrats are fiddling with is: "If you can't trust Tom Corbett on taxes, you can't trust him on anything."
The issue won't be whether the revenue increases were needed, since Democrats say all were, and probably would have raised more with all three. It will be this question: If the folks whose anti-tax pledge Corbett signed say he broke it three times, how can you trust him?
Because voters have to trust a governor to re-elect him.