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$13B tax cut clears major legislative hurdle

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(The Center Square) – A plan that cuts taxes in Pennsylvania by $13 billion over the next five years cleared the state Senate on Tuesday.

The proposal repeals a 2004 personal income tax raise and eliminates the gross receipts tax charge on electricity bills. It also makes a $6 million annual recurring transfer to the Alternative Fuels Incentive Fund and creates a $500 tax credit for volunteer paramedics.

Republican leaders say the proposal eases inflationary pressure for wage earners, business owners and “anyone who pays an electricity bill,” while simultaneously reversing the downward economic spiral stemming from population loss.

“That’s where our well-trained workforce has gone,” said Sen. Cris Dush, R-Brookville. “It’s gone to other states.”

A fiscal note for the bill estimates the proposal will reduce tax collections $1.2 billion in the coming year. That annual loss rises to roughly $3 billion during the next two budget cycles.

Republicans believe the cuts will stimulate economic growth enough to recover the lost money.

Critics beg to differ, saying the proposal is too much, too soon considering education and public safety investments – which would also keep people in the state – haven’t been settled.

House Minority Leader Jay Costa, D-Pittsburgh, said lawmakers received the bill language hours prior and, when some offered amendments, Republicans tabled them.

“Our members, our constituents, our industry leaders and our researchers need time to have a good-faith discussion about them,” he said.

Eight Democrats joined the chamber’s 28 Republicans to pass the bill, where it now heads to the House for consideration.