Op-Ed by Senator Scott Wagner
It may not be a surprise to anyone that the Commonwealth of Pennsylvania is again facing a budget shortfall. What does this mean? It is very simple – Harrisburg spends more money than it brings in. Unfortunately, for some, the solution is to raise taxes, rather than control spending and focus on efficiencies.
Most people know that I am a private sector business owner. In the private sector business world, business owners learn to manage and control costs first and only raise prices as a last resort. It is very clear to me that Harrisburg does not understand the concept of managing and controlling costs.
In no uncertain terms, I want to be very clear – I will not vote for any tax increases until Harrisburg begins to manage and control costs. As I have continued to say since day one when I arrived in Harrisburg in April 2014 – Harrisburg doesn’t have a revenue problem, Harrisburg has a spending problem.
Take for example the issue of property taxes, which voters sent me to Harrisburg to address. We were very close to passing legislation in the Senate at the end of 2015, but a tie vote of 24-24 was broken by a negative vote cast by Lieutenant Governor Mike Stack. The Lieutenant Governor recently wrote his own op-ed regarding property taxes, in which he stated he is proud of his vote. And while he acknowledges we need to do something to reduce (not eliminate) property taxes, his main focus is keeping businesses on the hook for 25% of all property taxes.
The Lieutenant Governor claims you, the taxpayer, would bear more of a tax burden if we did away with the property tax because these businesses would no longer be footing one-fourth of the bill for our expensive education system.
Why are we expecting businesses to carry the burden in the first place? Yes, it is a community effort to educate our students who will ultimately be employees, leaders, and for some, business owners. But who is really paying those property taxes that businesses are paying? You, the customer and their employees. You are paying through higher prices to cover costs. And higher costs mean less money to pay workers. It is a vicious cycle that we have the power to break.
I know I continue repeating the same message, but it is time that Harrisburg comes to its senses and digs in its heels and says enough is enough with excessive spending. Rather than fear the loss of property taxes from businesses, how about we look at controlling spending and managing costs within Pennsylvania’s education system?
Pennsylvania ranks 10th nationally for per student spending, averaging $15,560 – $3,400 above the national average. Of that, $5,580 is state funding while $8,743 is from local sources – your property taxes. In fact, the $5,580 is on point with the national average for state spending, but costs controlled by the teachers’ union – salaries, benefits, and pensions, combined with unfunded state mandates, result in an ever-increasing dependency on property taxes. To break the cycle and ultimately eliminate property taxes, we need to get control of those costs rather than focus on whether or not businesses are helping to foot the outrageous bill.
Of course, education funding and property taxes are only one piece of the state spending puzzle. As we head into the New Year and a new legislative session, the topic of the 2017-2018 state budget is already on the minds of many in the Capitol.
This past October, state departments presented their budget requests to the Office of the Budget, which has reviewed the proposals. In February, Governor Wolf will present his Executive Budget to the legislature, and the Senate Appropriations Committee will convene budget hearings with each department for three weeks beginning on February 21st.
According to a recent Independent Fiscal Office report, we could end the current fiscal year with a $500 million shortfall, which could escalate to $1.7 billion in the upcoming 2017-2018 budget. If I was to predict what we will see from the Governor’s budget proposal, I would venture to guess his budget will increase spending while raising taxes. I would rather be proven wrong on both points for everyone’s sake.
Heading into the new legislative session and the budget process, I will remain steadfast in my efforts to rein in spending and manage our government operations to prevent tax increases. I will also continue advocating for the elimination of property taxes. Senate Bill 76 will be reintroduced, and I am again, a co-prime sponsor of the bill, which has support from members on both sides of the aisle. Combined with the fact that the November election increased the majority to 34 Senate Republicans, we won’t need the Lieutenant Governor to cast a tiebreaking vote this year.