PA Senate Passes Tax Increase on Utility Bills to Balance Budget

HARRISBURG -– As part of a plan to close the $2 billion budget gap, the Pennsylvania Senate has voted 26-24 in favor of borrowing money and instituting some tax increases.

According to the Commonwealth Foundation’s press release, under the Senate’s $2.2 billion revenue plan, Pennsylvanians would pay a higher tax on cell phone service, home-heating bills, electricity, and some online purchases made through vendors such as Amazon and eBay.

The Senate’s $571.5 billion tax hike would cost a family of four nearly $180 dollars in higher taxes (details below).

A new natural gas gross receipts tax makes up the majority of the increase. About half of Pennsylvania households will pay this tax on their home heating bills. Additionally, the Senate added a natural gas severance tax on top of the impact tax drillers already pay.

NATURAL GAS PRODUCTION

The state would raise an estimated $100 million a year by imposing a new tax on natural gas production in the Marcellus Shale, the nation’s largest natural gas field. The effective tax rate for 2017-18 would be 2 cents per thousand cubic feet, although the annual tax rate may range from 1.5 cents to 3.5 cents. That would raise significantly less money than what Wolf had originally sought. In February, he proposed a 6.5 percent tax on the value of the production. In 2015, he had proposed a 5 percent production tax, plus 4.7 cents per thousand cubic feet. Money from the new severance tax would ensure that proceeds from an existing impact fee imposed on Marcellus Shale wells do not fall below $200 million a year.

BORROWING

The Senate plan would borrow $1.3 billion against future revenues that Pennsylvania will receive from its share of a landmark 1998 multistate settlement with tobacco companies. With interest and borrowing costs, that could mean Pennsylvania will repay $2 billion over 20 years. The scale of such long-term borrowing to prop up Pennsylvania’s general operations is unheard of in the state, say current and former state officials.

NATURAL GAS SERVICE

Consumers would face a new 5.7 percent tax on natural gas utility bills, or $5.70 on a bill of $100, to raise an estimated $300 million annually. Natural gas is Pennsylvania’s most prevalent home-heating fuel, used in more than half of the state’s roughly 5 million households. The tax would presumably be a growing revenue source as the number of households heated with gas rises.

ELECTRIC SERVICE

A tax on home electric bills would rise to 6.5 percent from 5.9 percent currently.

TELEPHONE SERVICE

A tax on home and cellular telephone bills would rise to 6 percent from 5 percent currently.

ONLINE SALES

Pennsylvania’s 6 percent sales tax would extend to third-party sales in online marketplaces.

GAMBLING

The Senate’s revenue plan counts on $200 million from an expansion of casino gambling in Pennsylvania, already the nation’s No.2 casino state.

Senate Republicans have had differences with Wolf and House Republican leaders. A proposal brokered by Senate Republicans would hinge on Pennsylvania’s casinos being able to bid on a satellite casino license allowing up to 700 slot machines and 100 table games at a new facility, and paying licensing fees to operate casino-style gambling on websites and mobile applications. Many details remain under wraps.

MEDICAID

The budget package would require the Wolf administration to seek federal approval to cut Medicaid costs and certain benefits, and create employment or job search requirements for working age, able-bodied adults.

TRANSFERS

The state would take $200 million from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association, an organization created by state law in 2002 to offer medical malpractice insurance. The association sued in federal court to block the state from borrowing that amount in the recently ended fiscal year.

Source: Senate Republicans

The following is some of the reaction to the passage on Twitter:

50 comments

  • Bob DiLuzio

    You are a disgrace, Tom Killian. Taking food out of our mouths to put money into your pocket for your retirement. Newly elected, lying about being a Republican. You are also against SB76 while Senior Citizens are losing their homes. You nothing but a fraud. RINO Bastard.

  • Anna

    Why not just bring in a few extra mill in legalized marijuana sales instead of raising our taxes and stealing our money… it’s already working great in other states and even reduces crime! 🙂

  • T. Edgar

    Please print all the names and office addresses and phone numbers of the Senators who voted for this. We the People of PA are living check to check. Guess we can not heat our homes or have a phone or electric. Nothing else could have been cut?

  • RicU.

    PA STATE Senators have to answer to no one. This is a case of “The Emperor’s New Clothes.” When we can’t pay for home heating fuel, they will be passing their next raise.

    I have TWO WORDS for this bunch of robber barons. Fortunately, they are both printable.

  • i quit..

    I ALWAYS STOPPED SPENDING WHEN THE CHECK BOOK WAS AT ZERO. BUT THAT IS USING COMMON SENSE. I GUESS GOV. HAS NONE..

  • Jeremy F

    This is TERRIBLE! TERRIBLE! Our gas bills are already too high as it is! If you use, say, only 20 dollars of the actual commodity, natural gas, to heat your home, your bill is about at least 3 times that. Why? Because you’re paying the majority of your bill for hookup and other fees that the gas company charges. This is going to be a disaster for hard working families who need to put gas in the car and food on the table, pay the mortgage/rent, phone bill etc… which by the way we already pay an outrageous gasoline tax too! Our gasoline tax is the highest in the nation. This bill looks like a big wolf in sheep’s clothing by imposing massive taxes on working families and poor people instead of taxing rich people and big wealthy corporations their fair share! Why is this war on the working poor, disabled people, and middle class so prevalent in this state???!!! Is it because these politicians are too arrogant and don’t care and think these classes of people are stupid?? I think that may be a big part of it. Not only that, their stupid campaigns are bought and paid for by these big rich entities! That’s bribery! Time to vote em’ ALL out next time THEY come up for re-election!!!! Especially the GOPers. These people are taxing stuff that poor people use most, and burning a gigantic hole in these folks wallets while the upper middle class and rich, including themselves(Congress), get to bask in the sun and wallow in their money. BS!!!! Time for a change! Will the working class and poor still have healthcare too? This is another disgusting issue. Many will have to take big cuts in healthcare services as well. The coming elderly, those 60 to 65 now…wooh, I feel bad for you guys too!!!!! Especially if you will rely mostly of your Social Security like many people do. Get ready to be way less better off than your parents now!!!!!

  • coacho

    People continue to stay in some of these undesirable regions of PA. A lot that have teaching jobs or prison jobs. At least they give good pensions in PA. Then spend that money in carolina or florida when they retire. That could be the only be reason. But between the pedophiles, high taxes, blighted neighborhoods, rundown infrastructure and roads. I see why many educated flee the state for good!

  • Get Off My Back!

    Here’s a novel idea you incompetent twits, make some difficult decisions and work hard on lowering expenditures before you keep dipping into our pockets. PA has to be one of the most mismanaged states in the country next to California.

  • Steve

    First how about not using tax payers money to run worthles “paid by PA tax dollars” ads!!! To put the burden yet again on people working their butts off just to get by and now making them maybe not being able to afford food, or gas, or electric… Selfish greed. Legalize Marijuana and take the profits for that jackasses. Leave us non rich people alone!!! Is Corbett and his goons gonna pay more also or will they give themselves a raise to offset such nonsense?!?! Release the proof, I want to see what every law maker in this state makes in a year, I want to see whats being charged to fix roads and bridges. And then I want to see how many free lunches and dinners they get with tax payer money. Ridiculous…

      • Norm

        Corbett is the reason why we have such high gas prices. Hell I am no ashamed to say I live on the New York border and I buy my gas over there when I travel to see family or friends.

  • Vote_Them_All_Out

    These idiots know a majority of Pennsylvanians are facing massive school property tax increases recently and in the future. They put a 35 cent tax on the gasoline. Know this!!! Vote them all out of office next election cycle. Why don’t they vote on reducing the size of the Pennsylvania legislature which is one of the largest in the U.S.A.

  • PA Resident -

    editor adjustment – 3 million not 300 million. Still a lot of money either way you look at it.

  • venustechnologynetwork

    As a former republican that went Democrat after living under the rule of Tom Gashole Corbett, one must wonder, how much longer will anyone vote republican? Republicans in Pennsylvania will tax your living expenses but they wont’ tax the corporation. They tax you more than they tax the gas industry. They also promise to do things like repeal Obamacare, and then with a republican controlled house, senate, supreme court, and presidency, they do nothing but golf. SMARTEN UP, stop voting for these frauds.

    • the truth sucks, but it's still truth

      12 of the 26 Senators that voted FOR HB 542 are Democrats, while 20 of the 24 Senators that voted AGAINST it are Republicans. Nice try, truth sucks for you. You still mad from the election bro?

    • McCain is a dope as are the rest

      You f-$,king democrats are the reason for all this stuff you sniffling fool! Wolf hasn’t done anything for us but raise taxes!

    • Canyon

      Your memory comes up pretty short, my friend. It seems you have already forgotten the tax raises implemented by Ed Rendell and he was cut short of other raises he was trying to get passed! You would make a great politician!

      • uncle eddy

        As a Republican I didn’t think Uncle Eddy Rendell would have raised taxes like that. Oh, I FORGOT – Uncle Eddy was a card carrying DEMOCRAT.

  • PA Resident

    $180.00 increase per household, how ridiculous is this seriously. Taxes just went up for the cost of fuel at the pump per gallon and tobacco products. How much more can Pennsylvanian’s survive taxes. What I would like to see from the state is a breakdown of all the taxes that for all services and how much the average cost is per household. Bet the amount we pay in taxes far exceeds how much we pay for any one service that is provided to us (phone, cable, etc.) While state/union education employees get nearly free health care for individual and/or family we have to succumb to their benefits and not the benefits of the community population. We need a real vote for the benefit of the people. As for the gambling where is that money going. Thought the casino’s were supposed to benefit us, guess this isn’t the case. Grant money as well. $300 million alone to Keystone College for a new building while our state infrastructure is crumbling (roads, etc.). Us citizens need a voice to see how our state is spending its money. Where can we find the state’s budget.

  • El Ma

    Oh, this all makes perfect sense. Think about it. The wealthiest corporations walk away with their zilliion-dollar CEO salaries and multi-bajillion-dollar bonuses while the people who actually make things run (or, not so much) pay out of their nose-holes to live.

    Electricity is already so outrageous that nobody is purchasing houses equipped with “electric” sources of heat. Consumers have to pitch in the taxes on natural gas utilities? What about these mining operations? What ever happened to the promised revenue from that? The road maintenance for the transport of all of that extraordinarily heavy equipment, to and fro, that these roads are not rated to handle? What ever happened to that promise from the gas companies?

    Who is running this asylum? Seriously. Where did this “wisdom” generate from? Did someone just wake up in the middle of the night and think, “Oh, YEAH!!! Tax the shyiat out of utilities and pass the deficit to residents and customers. And, while we’re at it, let’s solve the hunger problem in Pennsylvania by Xeroxing donuts.”

    Idiots, all.

    • Silverfish Imperetrix

      I don’t know if you’re old enough to remember the electric company’s (can’t remember which one) “Four Star Homes” scam when the power plant in Berwick was going up. They were encouraging everyone to build their homes with electric heat because it was going to be so so cheap, due to the power plant. The electricity made there was promptly sold in N.Y. and N.J. and everyone that bought into that nonsense got screwed. (Now there’s the non-existent ‘radon gas’ that’ll tack between $1200 and $1500 to the sale of an existing home to put their hoo-hah equipment in the home to ‘ventilate the gas’ and the buyer’s / seller’s wallets. It never stops with their lies.)

      • illegitimus imperetrix

        Radon gas is a naturally occuring gaseous radioisotope that is present in just about every basement of every home in PA. Like other carcinogens, people react to it differently. Newer homes that are ‘tighter’ and have fewer air exchanges put some people at a higher risk of contracting problems. “The electricity made there was promptly sold in N.Y. and N.J.” You don’t have a clue how any of the national electric grid works, do you? Are there dedicated lines going from the nuke to NY & NJ? No, there are not. The electricity you are using right now comes from that plant and every other plant in the area connected to the grid. You and EL MA should get together with Archie Beal and feed off each other with your lies and misinformation.

      • Silverfish Imperetrix

        The EPA itself can’t prove that radon gas causes lung, or any other kind of cancer. As I said, it’s a scam to get more money from the sale of homes. While you’re at it, why don’t you check on residents in 5 Pa. counties complaining about new power lines being run to N.J. and N.Y. because the old ones can’t handle the juice being sent there and it might affect the grid in the future. (That story is from 2013.)

      • ILLEGITIMUS IMPERETRIX

        “Radon is the number one cause of lung cancer among non-smokers, according to EPA estimates. Overall, radon is the second leading cause of lung cancer. Radon is responsible for about 21,000 lung cancer deaths every year. About 2,900 of these deaths occur among people who have never smoked.” Ripped right from the EPA website… Are you completely obtuse? Wow. And if you would remove your head from your backside for a few hours, you would notice that the electric utility sector is beefing up ALL their major infrastructure around the state. But please, go ahead and cherry pick to support your argument. Some people like to hear the whole story.

      • Silverfish Imperetrix

        “Ripped right from the EPA website”. You’re a special kind of stupid, aren’t you. It’s THEIR scam, Einstein.

      • ILLEGITIMUS IMPERETRIX

        Oh, I see – the EPA is in collusion with the small private companies that install the radon removal systems. I get it now. So the EPA gets a kickback from every system installed? Tell me, can you still cover your autism helmet with tin foil? Please, tell me more conspiracy theories. Is the earth flat? Moon landing faked? 9/11 – inside job, right? Elvis still alive? Chem-trails from the airlines?

    • el ma has spoken

      How do you get your rectum to type all that hyperbole? “nobody is purchasing houses equipped with “electric” sources of heat” Then why do I see new communites with nothing but heat pumps for their heating and cooling? I guess the saying is true that if you tell a lie long enough someone will start to believe it’s true.

      • El Ma

        “El Ma Has Spoken,” no need go full-retard and sperg-out, here. If you know anything about heat pumps, you’ll agree that they are the most inefficient means of heating and cooling, imaginable. They are being installed because they are CHEAP. In comparison with a boiler system for radiant heat, or even a hot air system fueled by oil or gas, heat pumps are a fraction of the cost to install and they cost a tremendous amount to operate. They function best in Southern and immediate West Coast climates, where temperatures don’t fluctuate to the degree that they do, here.

        As for rectums typing, well…………YAWN…………that was witty because my wittle feelings are so, so hurt. PFFFFT! (waves hand in dismissal)

  • Tjkat

    Of course, the politicians put us behind the eight ball and then increase our taxes!! Give me a break. Make the politicians and their staff pay their fair share. No free health care for them and lower their salaries. See how fast they live within their budget!! Throw them all out including the governor!!!

  • Silverfish Imperetrix

    And it’s ALL for the public sector unions (especially teachers) wages and benefits. That’s what Wolf means when he says the money is going for education. Good Democrats all.

    • Little fish big fish

      Awww, did the wittle fishy get passed over for job? That’s OK, there’s always Section 8 and SNAP. But you already know that, don’t you?

      • Silverfish Imperetrix

        I don’t like walking around with the taste of another man’s ass on my lips. Democrats love it.

  • Mcalluster Lee

    You wonder why people shoot politicians……
    This is effing crazy, first off their should not be any tax on any heating fuel….as I get older in life I see it getting harder and harder to just make ends meet…why continue to live? for what? just to pay tax after tax after tax…….death is looking better and better…..

  • Matt

    When you’re irresponsible with finances just force citizens to pay a higher tax percentage in exchange for no additional services.

  • Lloyd Schmucatelli

    Boy, it’s full of Friday news dumps today!! This, Obamacare repeal failed. Jeez.

    Drink up this weekend America! Forget your troubles by Monday once again!

Comments are closed.