On Dec. 28, Gov. Tom Wolf executed a line-item veto that allowed money to flow to social service agencies and school districts.
He could have used his line-item veto when first presented with the budget June 30. I believe this would have provided for a much better negotiating environment, resulting in the Legislature and governor likely having passed a full-year budget by now.
So, now that Wolf has vetoed 77 of 401 line items, we can focus on coming to agreement on those items. Talks will begin to determine how to find the revenue to support increased spending on the items. And in coming weeks, negotiations will focus on whether taxes should rise to support additional state spending.
Every year the Legislature passes approximately a dozen bills that make up the Pennsylvania budget. The two most significant bills are the General Appropriations Bill, or the spending bill; and the Tax Code Bill, or the income bill. Just as with your household budget, income must support all spending.
If the state had unlimited income from taxes and other sources, we could fund more services. This is no different than any individual who might like more personal income for additional spending. But unless he or she figures out a way to generate more income, he or she will need to budget using current income.
The state must operate under the same principles, as we are required to have a balanced budget each year.
Elected to represent the people of Pennsylvania, we legislators held a vote June 1 for the governor’s original spending plan. It called for a 3.7 percent personal income tax, up 21 percent from the current 3.07 percent, and a large expansion of the state’s sales and use tax and a boost in the rate to 6.6 percent in most of the state. This plan would have raised more than $12 billion in new taxes over a two-year period.
The result was unanimous — the governor’s original revenue plan did not receive a single vote from either party.
On Oct. 7, Wolf proposed another tax plan, and another vote was cast. This bill sought lower increases in taxes than the governor’s original proposal but required an increase in the personal income tax to 3.57 percent and also a severance tax. (The original claim of a “$1 billion natural gas tax” was never going to transpire because of the current market price of natural gas; the governor’s administration had to lower the revenue expectation to around $200 million.)
This proposal failed in the House of Representatives on a bipartisan vote of 73 in favor and 127 against.
Last month, discussions on the $30.8 billion “framework budget,” supported by Wolf, broke down because there was not enough revenue to pay for the governor’s spending plan.
The Democrats in the House and Senate, as well as the governor, cannot agree on how to raise taxes to pay for their spending. Some Democrats prefer raising the personal income tax, and some prefer raising the sales and use tax.
The current negotiations will focus not just on what the governor wants to spend, but on how much the citizens of Pennsylvania are willing to pay. My hope had been that we could find some additional savings and revenue from pension reform or liquor privatization, but those attempts were vetoed by the governor June 30. Current topics of discussion include increased tobacco taxes, gambling expansion, increases in the personal income tax, and a sales tax increase and expansion.
As previous votes and discussions in the General Assembly have proved, there is no consensus or agreement among the House, Senate and governor on a revenue plan. For most people, it is much easier to talk about how to spend money than it is to decide who should pay for the spending.
I will continue to fight for a fiscally responsible budget that respects the taxpayers of Pennsylvania.
State Rep. Steven Mentzer is a Republican lawmaker representing Lititz, all of Warwick Township and most of Manheim Township. He can be reached at Facebook.com/RepMentzer