Jul 14, 2016 3 min read

Pennsylvania legislators approved a revenue package Wednesday intended to provide enough funding to balance the $31.5 billion budget for the 2016-17 fiscal year, but several area legislators are unhappy with the plan.

The $1.3 billion package imposes higher taxes on cigarettes, smokeless tobacco and digital videos, books and music downloads.

On Sunday, Democratic Gov. Tom Wolf said he would allow the state budget bill to become law even without a revenue bill to support it, prompting concern about the legality of an unbalanced budget and a warning from a credit rating agency that the state’s bond rate could decline.

The revenue package passed the House, 116-75, and the Senate, 28-22, Wednesday before being signed that night by Wolf.

State Rep. Rick Saccone, R-Elizabeth, voted against and criticized the plan for increasing state spending by $1.29 billion and raising state taxes by more than $750 million.

“This budget increases spending by the widest margin in nearly a decade,” Saccone said in a news release. “Particularly troublesome is the fact that it finances spending increases by borrowing $200 million from other state accounts – money that must be paid back and will only make budget shortfalls in subsequent years worse.”

Rep. Brandon Neuman, D-North Strabane Township, was also concerned about the $200 million loan from a state medical malpractice insurance fund. Because of the fund’s nonprofit status, he doesn’t think it is eligible for use.

Neuman, who voted against amendments to the tax code, also questioned reliance on $100 million in internet gambling licensing fees from legislation that has not yet been passed.

“As anyone who follows (government) knows, you probably shouldn’t count on things until they happen,” Neuman said.

State Sen. Camera Bartolotta, R-Carroll Township, who voted against amendments to the tax code, said much of the spending increase is driven by mandates relating to human services, corrections and public employee pension costs. She said $485 million in new spending was required to fulfill the state’s public pension obligations. With those costs removed, she said, the increase would be about 1.8 percent more than last year’s budget.

Although she’s thankful the budget passed in a timely manner, and without last year’s stalemate, Bartolotta said the revenue package was a letdown.

“There are so many sources of revenue we should be pursuing and we’re not. If we don’t address the pension problem, we’re not going to need a Band-Aid, we’re going to need a tourniquet,” she said.

The plan increases the excise tax on cigarettes by $1, to $2.60 per pack, and imposes a 40 percent tax on the wholesale price of electronic cigarettes.

Saccone said the tax targets poor residents and opens the door to the black market with possible ties to organized crime and terrorist organizations.

“People say, ‘Oh, sure, raise the cigarette tax. That’s the easiest one to increase.’ What is seldom mentioned is that high cigarette taxes encourage criminals to smuggle cigarettes from out of state,” Saccone said.

Neuman said funding from nonrecurring revenue, like that from digital downloads, could put Pennsylvania in a worse position for next year.

“Some really good things in the budget will be funded, like opioid centers that help with addiction, but I do think it will end up being a problem next year,” he said. “We’re hopeful that there is more reoccurring revenue, and I hope that the bipartisan nature will continue in the fall so that we can do important things policy-wise before session ends in November.”