Well, this could complicate things going forward, in the Republican-controlled General Assembly.
The nation’s chief tax definer, Grover Norquist, has published an open letter to Pennsylvania lawmakers. He calls the Corbett Administration-sponsored impact fee slated for a final House vote this afternoon a tax. That’s primarily due to the amount of money the measure directs to state government agencies. “Just look at where the money goes and it is easy to see that it does not pass the laugh test when it comes to trying to claim this as a fee,” Norquist writes. “Regarding the revenue that HB 1950 would direct to the commonwealth, it goes to increasing revenue for first responder training, transportation infrastructure, health care provider training, and “citizen outreach and education.”
The letter sniffs at the idea Pennsylvania’s natural gas boom is straining local government resources, despite the fact Governor Corbett’s Marcellus Shale Advisory Commission found “demonstrated impacts” on the local level. As StateImpact has reported, municipalities and counties in drilling-heavy areas have seen marginal increases in tax revenue, but are now charged with providing services to scores of transient drillers and new residents.
Corbett, a Republican, has made it clear he plans to abide by Americans for Tax Reform’s “no new taxes” pledge, and his support for a county-level fee has been viewed by many as a way to work around the group’s tax definitions.The House bill is, by and large, Corbett’s plan in legislative form, aside from changes made earlier this week on local zoning regulations.
Last month, Norquist said Corbett’s county-level plan was a step in the right direction. Apparently, it wasn’t enough to earn the Americans for Tax Reform Seal of Approval.
Here’s the full letter:
Dear Members of the Pennsylvania General Assembly,
I understand that Gov. Corbett’s staff has responded to the letter that Americans for Tax Reform sent to you on Monday expressing ATR’s opposition to HB 1950. Their response simply entails a list of reasons of why they think this tax is a good idea. However, that doesn’t change the fact that HB 1950 is a tax.
Just look at where the money goes and it is easy to see that it does not pass the laugh test when it comes to trying to claim this as a fee. Regarding the revenue that HB 1950 would direct to the commonwealth, it goes to increasing revenue for first responder training, transportation infrastructure, health care provider training, and “citizen outreach and education.” Other businesses cause wear and tear on roads and bridges, yet HB 1950 singles out one industry to pay for upkeep. Other industries and the broader populace also benefit from increased funding for health care providers and first responders.
That’s just the commonwealth’s share of the revenue. The money that stays at the local level would be used for things such as “social services, including domestic relations, drug and alcohol treatment, job training and counseling.” So this is needed because of the economic boom in western Pennsylvania? Utilization of resources in the Marcellus Shale does have an impact, which has been the creation of tens of thousands of high paying jobs, which equates to LESS demand for the aforementioned services.
The ability to utilize Marcellus Shale resources is one of the best things to happen to Pennsylvania in decades. In the last five years it has generated over one billion dollars in state taxes and more than $7 billion in taxes, royalties, lease payments, and fees throughout the commonwealth. ATR is active in 50 state capitals. Trust me, lawmakers in the other 49 would love to be coping with such impacts.
This silly part of all this is the amount of money that is being talked about. It is estimated that HB 1950 could generate $120 million in the first year. While only 25 percent of that would go to Harrisburg, the total sum still represents less than two tenths of one percent of the state budget. If the additional services that this bill would fund are a priority, make it one. Budgeting is all about priorities. Those who say government needs to raise additional revenue on top of what is already being taken in are actually admitting it is their last priority.
The Commonwealth Foundation recently suggested that “elected officials should consider whether the current tax and fee structures need to be revised to cover any uncompensated costs of government. For example, is it appropriate to adjust local hotel and emergency services taxes to address large numbers of seasonal workers? Or are there other fee mechanisms that can be more directly tied to government services being provided to gas drillers?” I couldn’t agree more. Let’s take such considerations into account and make sure we get this right as opposed to just “having something.” Such considerations should also keep in mind that Pennsylvania already has the 10th highest state and local tax burden in the country and the nation’s second highest corporate income tax.
I understand that the regulatory side of this bill is positive. Great. Let’s separate those aspects out into a separate bill.
Again, ATR applauds Gov. Corbett for moving the ball in the right direction on this issue and for restoring fiscal sanity in Pennsylvania after eight years of tax and spend policies under Ed Rendell. Again, taking the time to get this right is better than simply “doing something.” If you have any questions please contact ATR’s Director of State Affairs, Patrick Gleason, at 202-785-0266 or firstname.lastname@example.org.