Phillips, Fairchild Denounce Tax Increases for PA Budget Deal
Responding to the residents and businesses of their districts that have called on them to prevent higher taxes in the 2009-10 state budget, Reps. Merle Phillips (R-Northumberland/Snyder) and Russ Fairchild (R-Snyder/Union) today voted against legislation that would increase taxes by $1 billion on hard-working families and job creators.
House Bill 1531 raises the Capital Stock and Franchise Tax on businesses by 53 percent, raises the state cigarette tax another 25 cents, adds a new tax to cigars and cigarillos and levies a tax on the extraction and production of natural gas. The bill also dramatically reduces the Educational Tax Improvement Credit (EITC), thereby discouraging businesses from contributing to local educational scholarship programs.
“From the cigarette tax increase to the severance tax on the extraction of natural gas and the 53 percent increase in taxes to the business community, the taxes included in this legislation are two of the most egregious on our working families and job creators,” Phillips said. “As we try to recover from the economic recession and stop the loss of jobs from our area, the last thing we should be doing is taxing job creators. This legislation represents irresponsible public policy that does nothing to move our state forward.”
Both lawmakers noted that the current crisis faced by day care centers, human service providers, school districts and other critical programs across Pennsylvania was not by accident, as the governor intentionally vetoed funding for their services. Rather than allowing them to receive funding through the bridge budget as approved by all four legislative caucuses, the governor sought to create “pressure” to further his own agenda.
“I resent the notion that this tax code bill needed to pass just to get a budget done,” Fairchild said. “Our constituents have continually told us to reduce spending and make sure that government only spends what it has available. Unfortunately, the governor and the House Democrats – who control all legislative movement in the House – have decided that it’s easier to pass flawed legislation to fill a budget hole than to responsibly address and bring to an end the excessive spending, which has increased more than $7 billion in the Commonwealth since 2003.”
As a responsible alternative, Phillips and Fairchild have supported House Bill 1943, which was developed by fiscal conservatives on both sides of the aisle. This proposal does not contain any new taxes but is able to fund vital government services and provide increases for education. It was presented in the House and to the joint House-Senate Conference Committee last month, but the three other caucuses refused to consider it, thereby dragging out the three-month long budget impasse even longer.
House Bill 1531 faces an uncertain future in the state Senate as the additional taxes included in it violate the agreement reached among the House Democrats, the Senate and the governor on Sept. 18. This action has the potential to revert budget negotiations back to square one.
Rep. Merle Phillips
108th District
(570) 286-5885
Rep. Russ Fairchild
85th District
(570) 524-2788
Contact: Jennifer Algoe Keaton
Jkeaton@pahousegop.com