Spending Cuts Missing In Pa. Budget

Spending Cuts Missing In Pa. Budget

By Leo Knepper

It looks like the General Assembly is in full-on “kick the can” mode on the budget. An article from the Patriot-News lays out the options the General Assembly is considering for closing the budget gap. None of them involve cutting spending.

One of the top contenders is using the tobacco settlement fund as collateral for a loan. Other options include expanded gambling and a “by the drink” tax for bars and restaurants on alcoholic drinks. Right now, the tax is somewhat hidden from patrons because it is collected at the wholesale level, i.e. per bottle paid by the establishment. The new proposal would move that to a per drink tax paid directly by the consumer. From the budget crafters perspective, they’re missing out on revenue because the price paid for a bottle of alcohol is much less than the price the establishment collects by selling by the glass, etc.

Another item under consideration would be to add a financial transaction tax on electricity transmissions. From the Patriot-News article:

“Senate Republicans are also vetting a new financial transactions tax that would be centered solely on the obscure business of buying and selling space on energy transmission lines.

“Pennsylvania plays host to this roughly $2.5 billion-plus market by virtue of our role as host to the business end of PJM energy grid. Some have drawn a parallel here to the state taxes collected by New York on Wall Street transactions.

“Those familiar with the issue say a 5 percent tax on this relatively small slice of PJM’s activities could net the state about $125 million per year, with minimal impact on the industry.”

Remember when Governor Corbett and the members of the General Assembly assured us that the tax they were raising on gasoline wouldn’t be passed onto consumers? That fallacious argument is rearing its head again on this tax. If this goes through, don’t be surprised to see your energy bill go up to recoup the cost.

Please, take a moment to contact the General Assembly. Tell them to get serious about cutting spending and stop the tax and spend shell game.

PS: CAP is trying to raise $5000 in the month of June. If you value our work, please make an investment in our organization today.

Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

Spending Cuts Missing In Pa. Budget

Spending Cuts Missing In Pa. Budget

One thought on “Spending Cuts Missing In Pa. Budget”

  1. Of course, there are no spending cuts. The Commonwealth is addicted to spending like the money will never run out. And as addicts more readily do, instead of kicking the addiction, we look for new sources to feed our habit.

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