What is the Fair Share Tax?

The main reason that Pennsylvania’s tax system is so upside down — with the top 1% paying only 4.3% of their income in taxes while the middle 20% pays 10% — is that the Pennsylvania Constitution prohibits us from enacting a graduated personal income tax. Sales and property taxes tend to take a higher percentage of the income of taxpayers at the bottom and in the middle than at the top. But graduated income taxes in many states — including all of our neighbors — compensate by taxing those at the top at a higher rate.

What Would an Adequate Pennsylvania Budget Look Like This Year?

What Would an Adequate Pennsylvania Budget Look Like This Year? 

A really good budget for Pennsylvania would begin addressing our long-term public investment deficit. It would provide new funds to: 

  • eliminate our worst-in-the-nation inequality in K-12 school funding; 
  • expand pre-K education to all three and four year-olds;
  • make higher education more accessable, especially to students from low-income families;
  • restore the funding that would allow the Department of Environment to better protect our air and water;
  • provide new funding to repair roads and bridges and support public transit.

With Public Pensions Done, It’s Time Now for a Victory on Retirement Security...and a Great State Budget

Roughly five years after Gov. Corbett first began an effort to eliminate guaranteed pensions for future school and state employees, Gov. Wolf today signed a bill that reduces the guaranteed portion of future pensions by about three-eighths (because the pension increases with each year of service by 1.25% of final salary instead of 2%). Alongside this smaller guaranteed pension, future employees will receive a 401(k)-style savings account. If these savings are converted into a second monthly check – an “annuity” – “actuaries” estimate (Table 9, p. 19) that the total retirement benefit for future career employees will be within 16% to 18% of the retirement benefit received by employees under the prior (Act 120) pension plan (enacted in 2010).

In sum, the enacted pension compromise is a smaller cut in benefits than earlier “hybrid” (combined DB-DC) proposals (such as this one with a smaller DB multiplier). Together with Social Security, the new hybrid pension will maintain retirement security for future school and state employees.

Kansas’ Experiment Yields Valuable Lessons

The following post was written by Heidi Holliday, Executive Director at Kansas Center for Economic Growth. 

You’re welcome, America. Our state, Kansas, just wrapped up a 5-year long experiment in governance from which the other 49 states can now glean some important lessons. The Kansas Legislature has voted to roll back much of the 2012 package of tax cuts that sent the state into a downward spiral of financial instability and weakened the Kansas’ public schools, universities, Medicaid program, and virtually everything else that the state funds.

With the state facing yet another budget shortfall of $900 million, government leaders decided that enough was enough. Governor Brownback, who heralded the 2012 experiment, was proposing yet more temporary band-aid approaches and more cuts deal with the shortfalls. The Legislature chose a different path and instead sent the Governor a bill that would raise more than $1.2 billion in new revenue over two years by, among other things, repealing a costly tax break for pass-through income, rebalancing individual income tax rates by reinstating a third tax bracket, and reversing course on the Governor’s plan to eliminate our state income tax. Brownback vetoed the legislation but, with bipartisan support, the House and Senate quickly overrode the veto.

Ding Dong the Witch is Dead

Sam Brownback became governor of Kansas in 2010, just as Tom Corbett became governor of Pennsylvania. Brownback and Corbett, with the help of Republican majorities in their legislatures, embarked on an extremist Wizard of Oz economic agenda of cutting taxes, especially for large businesses, and reducing spending on education and human services. Spending as a share of the state’s economy dropped by 10% in our state.
 
Faced with slow economic growth, stark budget deficits, and citizens who were demanding better public services, a bi-partisan majority in the legislature in Kansas this week stood up for common sense against Wizard of Oz extremism and, over Brownback’s veto, rolled back many of those tax cuts.
 
Is this the year that state legislators in Pennsylvania also embrace common sense and reject extremism?
 

Pennsylvania's Budget Choices This Year

As we head into what everyone hopes will be the last month of the Pennsylvania budget season, this is a good moment to take stock of where we are and what’s at stake in the decisions the Governor and General Assembly will make this year.

Doing so will also explain why the Pennsylvania’s Choice campaign is urging people to attend a tele-town on the budget at 7:15 on June 1, a budget rally at noon on June 5 in Harrisburg, and lobbying days later in the month. (More information and registration for these events can be found here.)

It's Not Just a Number: PBPC Statement on the CBO Score of the AHCA

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The Congressional Budget Office (CBO) analysis of the Republican health care plan, the ACHA, released today shows the danger of Congressional action in advance of a serious analysis of the impact of legislation. Though it was touted as a new and improved version of the bill that failed in March, the CBO analysis shows the bill that passed the House is no better, and in some ways, far worse. The CBO estimates that, at the end of ten years, 23 million fewer Americans will have health insurance because of the legislation, which is one million less than the estimate of their earlier bill.

The Trump Budget

President Trump’s budget is a triple betrayal — of his campaign promises, of working people in Pennsylvania and around the country, and of a uniquely-American economic order that has created the shared prosperity that America once enjoyed and should enjoy again.

The President is, first, betraying his promise not to cut Medicaid, Social Security, and the social safety net — that is, programs relied on by those left behind in a changing economy.

PBPC Statement on the AHCA Vote

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HARRISBURG – Marc Stier, Director of the PA Budget and Policy Center, made the following statement following today's passage of the American Health Care Act by the U.S. House:

 "Today the Republican controlled House of Representatives passed legislation that will strip health insurance from 1.3 million Pennsylvanians, will lead to the pre-mature death of 3,250 Pennsylvanians for lack of health insurance, and will threaten the health insurance of five million Pennsylvanians with pre-existing conditions. If the the health care exchanges survive, premiums for older adults will skyrocket, making health insurance unaffordable for most Pennsylvanians between the age of 50 and 64. 

ACA Repeal Puts Pennsylvanians Who Work for Large Corporations At Risk

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The disastrous implications of the GOP health care bill are becoming ever more apparent, especially for those who get their insurance from large national corporations. Under the bill, even if Pennsylvania does not opt-out of the federal essential benefits regulation, large multi-state employers could choose to deny Pennsylvanians coverage for pre-existing medical conditions or particular conditions, such as pregnancy. Or they could impose annual or lifetime limits on coverage.

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