State Budget and Taxes

How Would You Balance the State Budget?

The Patriot-News asked us at the Pennsylvania Budget and Policy Center to offer our thoughts on alternatives to Governor Tom Corbett's proposed state budget. You can read our take at the Patriot's web site.

In a nutshell, we called for a no-increase state budget for 2011-12 — with spending at $28.1 billion, the same as in 2010-11 but less than the enacted budget for 2008-09. Such a plan will require belt-tightening but would allow us to avoid deep cuts to public schools and universities.

Third and State This Week: Big Budget Rally, Mexican Trade Deficit & Marcellus Shale Taxes

This week, we weighed in on a debate over the tax payments of drillers in Pennsylvania. We also blogged about the state's revenue surplus, a big rally at the State Capitol and the Pennsylvania jobs toll of a trade deficit with Mexico.

IN CASE YOU MISSED IT:

  • On the Marcellus Shale, Sharon Ward responds to a Pennsylvania Department of Revenue analysis of the tax contributions of the oil and gas industry. Michael Wood writes about comments made by Revenue Secretary Dan Meuser in The Pittsburgh Post-Gazette on the issue of whether gas drillers are structuring their businesses as pass-through entities to cut their state tax bills.
  • On state budget and taxes, Chris Lilienthal shares a short video from this week's Rally for a Responsible Budget which brought more than 5,000 Pennsylvanians to the State Capitol. Michael Wood writes that better-than-expected revenue collections in April have pushed Pennsylvania's General Fund revenue surplus to over $500 million.
  • Finally, on trade issues and jobs, Stephen Herzenberg blogs about the findings of a new Economic Policy Institute report on the U.S. trade deficit with Mexico. In Pennsylvania, that deficit has cost us more than 26,000 jobs since 1994.

More blog posts next week. Keep us bookmarked and join the conversation!

Crowd of Thousands Rally for a Responsible State Budget

A crowd of thousands rallied on the steps of the Pennsylvania Capitol Tuesday to call on lawmakers and the Governor to enact a responsible state budget — one that closes tax loopholes and ends special tax breaks before making deep cuts to schools, colleges, prekindergarten, health care and services for victims of abuse.

Revenue Analysis Goes Well Beyond Taxes Paid by Drillers

Last week, the Pennsylvania Budget and Policy Center released a report outlining the favorable tax treatment enjoyed by the natural gas industry in Pennsylvania. The report was intended to provide an understanding of the actual taxes paid by the companies that would be directly impacted by a drilling tax.

Federal incentives cut the state and federal tax bills of drillers, and unlike in most energy-rich states, oil and gas reserves are exempt from property taxes in Pennsylvania. The report cited Department of Revenue data showing that oil and gas drillers paid only $38.8 million in state business taxes in 2008.

This week, the Pennsylvania Department of Revenue is out with its own analysis claiming that the drilling industry is paying a lot more than that. But as I explained in a media statement today:

The Department of Revenue’s new analysis makes an apples to oranges comparison of the taxes paid by companies engaged in natural gas drilling.

Strong April Puts Pennsylvania's Fiscal Surplus at $506 Million

In some very good news for Pennsylvania’s budget, the Commonwealth saw its fiscal-year surplus grow to $506 million last month.

Better-than-expected collections in April – the second largest revenue month of the year – will likely position the Commonwealth to end the 2010-11 fiscal year with a significant surplus. This could offset some of the deep cuts to K-12 education, colleges, health care and human services that were proposed in the Governor’s 2011-12 budget.

Third and State This Week: Zombies, Millionaire Taxes and Gas Drillers

This week, we blogged about New Jersey's millionaire tax, taxes and Marcellus Shale drillers, zombies and much more. 

IN CASE YOU MISSED IT:

  • On state budget and taxes, Steve Herzenberg explains that a millionaire tax didn't chase the rich out of New Jersey. In light of that, Steve writes, Pennsylvania should consider enacting a higher tax rate on unearned income, which would mostly impact top earners in Pennsylvania. Kate Atkins, meanwhile, posts a short video of a Berks County rally for a better state budget.
  • On the Marcellus Shale, Sharon Ward invites each natural gas drilling company in Pennsylvania to release details on the state and local business taxes it pays. And Chris Lilienthal shares concerns about Senate President Pro Tempore Joe Scarnati's proposed local impact fee on Marcellus Shale drillers.
  • Finally, Mark Price fights zombies who believe that only the rich pay taxes.

More blog posts next week. Keep us bookmarked and join the conversation!

Advocates Call for Better Budget at Reading Rally

About 100 Reading area residents rallied outside the Berks County Services Center Wednesday to call on lawmakers to close tax loopholes and end special tax breaks before making deep cuts to schools, colleges, and services for people with disabilities.

The event, sponsored by Better Choices for Pennsylvania and the CLEAR Coalition, featured Mike Morrill of Keystone Progress as emcee. Keystone Progress put together a short video to highlight the best parts of the event.

Millionaire Tax Didn't Chase the Rich From Jersey, So Why Not a Higher Tax Rate on Pa.'s Top Earners?

Anti-tax advocates maintain that higher tax rates on the wealthy lead to millionaire flight. But a study of a 2004 “millionaire tax” in New Jersey shows that, in fact, the rich don’t move to avoid higher taxes.

The new study was written by sociologists at Stanford and Princeton and published in The National Tax Journal. Economist Robert Frank reported on it in The Wall Street Journal, writing that the study “provides some of the most detailed evidence yet that so-called millionaire taxes have little effect on the movements of millionaires as a whole.”

Zombie Ideas: Only The Rich Pay Taxes

A big part of our work is fighting zombie ideas — claims that don't actually have empirical support but just keep getting repeated over and over again.  On Friday and again this morning, Paul Krugman let loose his wicked cricket bat on one we hear repeated ad nauseam by Harrisburg pundits.

Third and State This Week: Closing Loopholes, a Flawed School Vouchers Plan and More

This week, we blogged about closing tax loopholes on Tax Day, a deeply flawed school vouchers plan in the state Senate, Governor Corbett's claims about property taxes in Texas, and much more. 

IN CASE YOU MISSED IT:

  • On education, Steve Herzenberg wrote that despite amendments made to the Senate school voucher bill, it remains a deeply flawed and expensive new program, with little to no accountability.
  • On state budget and taxes, Sharon Ward shared her Tax Day op-ed in the Pittsburgh Post-Gazette, where she suggests that instead of grumbling about taxes this year, we start the work of closing tax loopholes that disproportionately benefit the well-connected few. Meanwhile, Chris Lilienthal passed on Tax Day resources from the Center on Budget and Policy Priorities and Demos' Taxes Matter Project to provide a fresh perspective on how we think about taxes. And Michael Wood posted a video clip from a Monday press conference, hosted by Common Cause Pennsylvania, where he and good government advocates called on lawmakers to close tax loopholes before cutting schools, colleges and services for vulnerable Pennsylvanians.
  • Finally, on the Marcellus Shale, Michael Wood sets the record straight on what taxes Texas drillers do and don't pay, in response to recent comments by Governor Corbett.

More blog posts next week. Keep us bookmarked and join the conversation!

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