EDITORIAL Hidden taxes in Pennsylvania’s budget will hurt consumers

August 2, 2017
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Jim McNutt/Observer-Reporter Exterior of the Observer-Reporter building in Washington.

For years, environmentalists and liberals have been pushing for a severance tax on the natural gas industry.

They got their wish, in a sense, last month when the state Senate narrowly passed a $2.2 billion revenue package with bipartisan support – and dissent – that included a small severance tax that is expected to generate about $100 million annually.

It makes sense that the implementation of a severance tax would be the biggest headline grabber within the revenue package after years of wrangling and arguing over it. Still, it’s hardly a burden for the industry and less than half of what it paid in $225 million impact fee disbursements in 2014 through Act 13.

But what will be a much larger burden is buried away in the revenue bill that comes in the form of higher utility taxes on consumers.

A new 5.7 percent tax on natural gas bills would cost consumers $5.70 for a $100 utility bill. Meanwhile, the current electricity tax would be increased by more than a half-percent to 6.5 percent. Also, the taxes on phone bills – both landlines and cells – would be increased by 1 percent to stand at 6 percent.

Let’s be clear: This state Senate’s revenue bill is a tax increase on all Pennsylvanians.

Do you heat your house with natural gas? Your taxes are going up.

Do you use electricity for fancy things such as lights and air conditioning? Once again, your taxes are going up.

Do you like to talk to people over the telephone? Yes, indeed, your taxes are going up.

All together, the increases in utility bills are expected to bring in more than $400 million each year. That’s four times the amount the drillers will be paying from their higher taxes.

So let there be no mistake who is bearing the financial brunt of this budget. It’s the taxpayers.

That’s surprising considering the Republican-controlled Senate could have blocked any revenue package that increased taxes, whether to utility bills or the natural gas industry.

Senate Majority Leader Jake Corman, R-Centre, said Republicans had no choice but to pass a revenue package that included tax increases on consumers. A previous effort to fund the government and fill a more than $2 billion hole in the budget failed.

“We came here to make tough choices,” he said to his colleagues while urging them to vote for the package.

Sen. Scott Wagner, R-York, disagreed and blasted the tax increases. He’s also planning to run for the Republican nomination to challenge Gov. Tom Wolf’s re-election bid next year.

“The only winner is the beast that is state government,” he said.

There are deep-seated problems within Pennsylvania’s government and its budget as a whole. That’s illustrated by the increases on three indispensable utilities – warmth, lighting and communication – that every Pennsylvanian regardless of his or her income status must now bear.

Our legislators, both Republicans and Democrats, better get this runaway budget train under control soon or we’ll all be paying for it with more than just our utility bills.



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