Democratic Leaders Outline Specific Revenue Initiatives

Harrisburg – November 15, 2013 – On the heels of the Independent Fiscal Office’s (IFO) release of its budget outlook report suggesting that Pennsylvania is facing a structural deficit of $839 million next year, state Senate Democrats said today the blame for continued economic uncertainty and gaping budget deficits lies at the feet of Gov. Tom Corbett and his administration.

“For several years, the one thing that the governor has pointed to as an ‘accomplishment’ is his stewardship of the budget,” Senate Democratic Leader Jay Costa (D-Allegheny) said. “Given this new independent report and the data suggesting continued daunting budget deficits on the horizon that claim looks highly suspect and disingenuous.

“It’s not enough that the budget gets passed on time; it has to include bold initiatives and an investment strategy that moves Pennsylvania forward and that has not been the case with the Corbett budgets.”

Senate Democratic Appropriations Chair Sen. Vincent J. Hughes (D-Philadelphia) said that Corbett’s lack of leadership on economic development and business investment has resulted in not only severe budget deficits but a job deficit as well.

“If jobs were created in Pennsylvania at the same rate as rest of the nation, there would be at least 150,000 more Pennsylvanians working right now,” Hughes said. “These new employees would have resulted in the addition of several hundred million dollars annually in revenues that could be used to balance the budget.

“Plus, by simply moving forward with Medicaid expansion, the governor could have gained a huge infusion of new federal money at the exact time when we need it most.”

The Senate Democratic Leaders said that the IFO’s conclusion that the last several Corbett budgets were balanced with surplus funds carried over from the Rendell administration is significant. The IFO indicated that those surplus funds will be nearly exhausted by the end of this year.

“Governor Corbett has failed to lead Pennsylvania down the path toward economic recovery,” Costa said. “The governor’s track record is disappointing — long on politics, quick at finger pointing, but short on solutions.”

Hughes said that the governor has lacked an investment strategy that would reverse the jobs drain and that Pennsylvania shouldn’t be positioned at the tail end of all states in new job generation. Pennsylvania has gone from the top ten to the bottom ten in job creation during Corbett’s tenure.

“Job creation is not the only area that has suffered,” Hughes said. “We’ve seen devastating cuts to many critical areas because of Governor Corbett’s irresponsible fiscal policies, especially nearly $1 billion cut from public education. That is not a path we can go down again in the next budget.”

The leaders recited a litany of issues that continue to plague Corbett including uninspiring increases in employment, budget shortfalls, struggling local schools, spikes in property taxes, gaps in health care and the governor’s penchant for pushing tax cuts for large corporations that Pennsylvania taxpayers cannot afford.

Costa said that his caucus has outlined better, common sense and forward-looking revenue approaches that would change the state’s fiscal direction. He said that Senate Democrats have identified more than $1 billion in new revenues that are available to stanch the flow of fiscal red ink.

He outlined several ideas put forth by Senate Democrats to address Pennsylvania’s fiscal challenges:

  • Expanding Medicaid — $400 million;
  • Escheat Reform — $150 million;
  • Wine and Spirits Modernization — $125 million;
  • Charter School Reform — $95.5 million;
  • Freeze Capital Stock and Franchise tax phase out — $75 million;
  • Multi-state claims processing for SSP/SSI – $75 million;
  • Enhanced tax collection — $55 million;
  • Medicaid Managed Care — $50 million;
  • Tobacco products tax — $36 million.

“Yesterday’s IFO projection validates what Senate Democrats have been saying for months,” Costa said. “What was once a situation that needed to be addressed has turned into a crisis that we’re battling from all angles.”

Costa said that Senate Democrats have repeatedly made detailed suggestions about how the deficit issue could be addressed during a number of budget priority news conferences and briefings, but the Corbett administration has ignored their ideas.

“Over the course of the last four years, the landscape in Pennsylvania has changed dramatically,” Hughes said. “What we see is a governor who pushes ideological concepts that have no support beyond his inner circle and have failed to yield results.”

The IFO released Pennsylvania’s Economic & Budget Outlook: Fiscal Years 2013-14 to 2018-19 yesterday.