Noting that the litany of tax increases being proposed to balance the state budget hits a broad swath of Pennsylvania residents and employers, Rep. Sam Smith (R-Jefferson) said today he continues to stand in firm opposition to any new or increased state taxes.
“Make no mistake about it, rural Pennsylvanians will be hit disproportionately hard if these taxes are enacted,” Smith said. “The increases will impact small business owners, tobacco consumers, families with children, and people involved with the Marcellus Shale natural gas extraction. When you look at all the different types of tax increases being proposed, it’s a pretty broad-based group of people that will be hurt.”
He said some have characterized opposition to a tobacco tax as supporting ‘big tobacco,’ when in fact it is just the opposite. “Everyday citizens – our blue collar workers, factory workers and gas well operators – are the ones who will pay this tax, not big tobacco. The people who will pay are already stretched thin enough.”
Smith added that the tax increases proposed in the Democrat legislation scheduled to be debated today would total more than $1 billion. He said House Republicans have already shown, via House Bill 1943, that a responsible budget can be enacted without new or increased taxes.
The bill includes a 5% severance tax on natural gas extraction and a 4.7 cent tax per each thousand cubic foot extracted. These taxes will be paid by the producers.
“Imposing a tax on the Commonwealth’s newest industry is tantamount to saying to natural gas producers, ‘Welcome to Pennsylvania. Here’s a new tax.’ It’s something that will crush jobs and possibly cripple the most promising new business that’s come into our state in quite some time.”
Smith said another program targeted for reduction in order to balance the state budget is the Educational Improvement Tax Credit Program, known as EITC. He said families and children in rural Pennsylvania could also suffer from the proposed cut of $50 million over the next two years.
Since its inception in 2001, the EITC program has provided tax credits to Pennsylvania businesses which in turn have enabled thousands of low and middle-income children to receive scholarships to attend nonpublic schools and support innovative programs in public schools.
“As the Philadelphia School District stands to receive a 28% or nearly $300 million increase in education funding, it’s truly unfortunate that EITC funding may no longer be available to support school districts and help families. There is just no reason these children should suffer this year.”
Smith stressed that House Republicans began calling for consideration of the state budget in May. In the absence of action, they introduced and supported two compromise budget proposals that would have avoided a tax increase, funded the core functions of state government and controlled spending.
“We need to get this budget done, but we need to keep the people of Pennsylvania in mind. Increasing taxes and spending this year will only lead to problems in the future. We think state government needs to do what every family is doing out there and that’s tighten the belt and live within our means. House Republicans believe Pennsylvania could thrive if we passed a $27.5 billion budget which does not raise taxes.”
Representative Sam Smith
Republican Leader
PA House of Representatives
Contact: Kelly Fedeli (717) 787-3845