Thursday, July 27, 2017

Everyone - including gas drillers - will pay more under Pa. Senate plan

Here's the bottom line on the ongoing budget battle in Harrisburg.

The numbers did not change, no matter how much cajoling and arm-twisting was done.

The Legislature passed a $32 billion spending plan, but only accounted for about $30 billion in revenue.

You do the math.

Pretty hard to make those numbers add up.

That finally appears to have sunk in with members of the state Senate. Today they are poised to approve a revenue package that will cost just about everyone a little more - and which will include a new severance tax on the state's natural gas drilling business. The push for new revenue - and the long-sought severance tax - was backed by moderate Republicans from southeastern Pa., including state Sen. Tom McGarrigle, R-26, of Springfield.

Here's what the Senate wants to do to close the state spending gap:

* Slap a new tax of 2 cents per thousand cubic feet of natural gas from the Marcellus Shale regions. That would raise an estimated $100 million, less than what was proposed in the past by Gov. Tom Wolf, who first proposed a 6.5 percent levy, than a 5 percent levy in his first two budgets. Both plans failed.

* Of course the state also is going to borrow more money - this time as much as $1.3 billion.

* There will be a new tax on natural gas - on that will hit customers in the wallet - of 5.7 percent, or $5.70 on a bill of $100.

* Hike the tax on home electric bills from 5.9 percent to 6.5 percent.

* Increase the tax on home and cell phone bills from 5 percent to 6 percent.

* Extend the state's 6 percent sales tax to sales in online marketplaces run by third-party vendors.

* The state would take $200 million from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association, an organization created by state law in 2002 to offer medical malpractice insurance. The association sued in federal court to block the state from borrowing that amount in the recently ended fiscal year.

Of course, the state also will look for a boost - in the neighborhood of $200 million - from increases in casino gaming.

While this plan is expected to gain approval in the Senate today, it faces a much sterner test in the House, where Speaker Mike Turzai, R-Allegheny, has made clear he is opposed to any new taxes.

Turzai is believed to be considering a run for governor.

It will be interesting to see if he holds fast in opposing new taxes, in particular that long-sought new levy on natural gas drilling in the state.

You can get all the details on the new Senate revenue plan here.

In the meantime, we'll be talking to Sen. McGarrigle and other Delco senators to see where they stand.

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