2009-10-08 / Features

Hess Votes Against Legislation To Increase Taxes By $1 Billion

Rep. Dick Hess (R-Bedford/ Fulton/Huntingdon) on Monday voted against House Bill 1531, an element of the state budget, which would increase taxes on Pennsylvanians by $1 billion and unfairly distribute $300 million in additional funding for education.

“The last thing state government should do is extract more money from the taxpayers of Pennsylvania,” Hess said. “The current recession has resulted in massive layoffs and reduced incomes throughout the commonwealth.”

Of notable concern to Hess, this legislation would reduce the Educational Income Tax Credit (EITC) for businesses that provide funding for educational scholarships for students in grades K-12. This program has provided opportunities for students to enter pre-K and funding for innovative programs in public schools throughout Pennsylvania.

In addition, the 2009-10 budget increases funding for education by $300 million. Forty-one percent, or $123 million of this amount, would be funneled to the School District of Philadelphia. This leaves $177 million to be distributed among the remaining 499 school districts in Pennsylvania.

“Students in one region of the state should not fare better than students in other areas,” Hess said. “All students are equal and should be funded accordingly.”

This bill would impose a severance tax on natural gas extracted from the Marcellus shale formation as well as a tax on each gas wellhead, which would further impair job creation in Pennsylvania.

“This relatively new industry could benefit the commonwealth by creating family-sustaining jobs and economic growth,” Hess said. “We must allow this sector to establish itself and these taxes will curtail further development.”

This legislation proposes to increase the capital stock and Franchise Tax by 53 percent and would retroactively increase the tax back to Jan. 1, 2009. This would require businesses to make unbudgeted catch-up payments to the commonwealth for the past nine months. This tax, paid by businesses based on their value, would revert to the 2008 rate of 2.89 mills. In addition to the severance tax on natural gas, an increase in the CSFT would eliminate jobs and increase prices.

“More often than not, businesses pass tax increases onto consumers who ultimately pay more for products and services,” Hess said. “Any tax increase is ultimately borne by the citizens of Pennsylvania who cannot afford unnecessary expenses.”

Hess added that House Republicans, on several occasions, have offered budget alternatives that were balanced, reduced spending and required no tax increases.

“The people of Pennsylvania have spoken loud and clear that higher spending and increased taxes are unacceptable,” Hess said.

Return to top