The math did not lie in Harrisburg
Even in the fantasyland of state finance that is par for the course in Harrisburg, the math was inescapable.
That’s what happens when you pass a budget that calls for $32 billion in spending, but only contains $30 billion in revenue. You do the math. Yep, it does not add up. Wednesday night the state Senate - led by moderates from southeastern Pennsylvania, including Delaware County Sen. Tom McGarrigle - hammered out a revenue plan that contains something for everyone. In other words, everyone is going to pay more. But for the first time, that will include the state’s natural gas drilling business.
Thursday morning it passed by a razor-thin margin, 26-24.
McGarrigle is one of those who has long been in favor of a severance tax on natural gas, as opposed to the impact fee finally settled on by former Gov. Tom Corbett, in part so he could uphold a pledge not to raise taxes.
In the interim, the state has missed out on valuable revenue.
Under the Senate plan, natural gas drillers will still pay more – but nowhere near what they would have under plans first championed by Democrats and Gov. Tom Wolf.
Under the Senate plan, the state would slap a new tax of 2 cents per thousand cubic feet of natural gas from the Marcellus Shale regions. That would raise an estimated $100 million. That’s a lot less than what was envisioned by Wolf, who first proposed a 6.5 percent levy, than a 5 percent levy in his first two budgets. Both plans failed as Republicans held fast to their “no new taxes” pledge.
Before you do cartwheels over the notion of natural gas drillers paying more, get out your wallet. That’s right. Taxpayers will be paying more as well.
Here’s what else the Senate has in mind:
• Heat your home with natural gas? You will pay more, 5.7 percent, or $5.70 on a bill of $100.
• Do you use electricity? You’ll be zapped, with a hike in the tax on home electric bills from 5.9 percent to 6.5 percent.
• Use a phone? You’ll pay more, with an increase the tax on home and cell phone bills from 5 percent to 6 percent.
• Buy things online? The state will extend the 6 percent sales tax to sales in online marketplaces run by third-party vendors.
Of course, there also will be a healthy dollop of the state’s favorite revenue source - more legalized gambling. And the state still plans to borrow bib buck as $1.3 billion from the tobacco settlement fund- to balance the books.
It is not a perfect solution. But it does spread the wealth - and the bill. Everyone will pay more.
But it is not a sure thing - even after it passed the Senate.
That’s because it will face a much less certain fate in the House, and no doubt will earn the wrath of Speaker Mike Turzai. The Allegheny County Republican, who is tinkering with the notion of running for governor, has been adamant once again in standing against new taxes. He inserted himself in discussions and blew up a deal that appeared close in these talks already.
Turzai has been a proponent of a huge expansion of legal gaming, as well as an old Republican standby, getting the state out of the booze business, blowing up the Liquor Control Board, and turning the entire system over to private enterprise, including selling off those lucrative licenses.
Various parts of these plans have been talked about forever.
But none of them have ever actually made it to the governor’s desk.
Despite the fact that Republicans control both the state Senate and House, they have been unable to agree on a single method to raise the revenue needed to fund the state - without the kind of draconian cuts that pushed former Gov. Corbett out the door.
The best that can be said about the Senate plan is that it is a compromise, spreading out the burden among various state interests.
Do we wish the state’s natural gas drillers were paying more and taxpayers less? Absolutely.
But this measure will fund the $32 billion spending plan and avoid any massive cuts in services.
It also will allow the state to step away from the financial abyss, a perch that has credit ratings agency once again looking to lower the boom on the state’s credit rating.
It is still not the vehicle the state truly needs to adequately fund the state’s needs, in particular education.
But, as is the norm in the state capital, it will have to do.
Turzai and his House colleagues should join their colleagues in the Senate and pass this funding measure.
Even if they’re holding their noses when they do it.