Rep. Dan Moul, R-Adams County, introduced the Taxpayers' Budget and the lawmakers who worked on it at a Capitol news conference on Tuesday.
Jan Murphy | jmurphy@pennlive.com
After spending more than six weeks kicking over stones to find existing money to fully balance the enacted $32 billion state budget, a group of rank-and-file Central Pennsylvania Republican lawmakers came up with a plan to accomplish that without raising a major tax or borrowing money.
Calling it the “Taxpayers' Budget,” the plan taps various funds that are designated for a specific purpose, eliminates $189.4 million of previously approved spending for this fiscal year, and does other maneuvers to more than cover the need for $2.2 billion in revenue. It is proposed to raise $2.44 billion.
“Until and unless every source of reserve revenue is exhausted, we should not and are not asking more of our taxpayers. We’re simply doing what we should be doing: serving as good stewards of their hard-earned tax dollars,” said Rep. Dan Moul, R-Adams County, at a Capitol news conference on Tuesday when the revenue plan was unveiled.
Moul stood with 17 lawmakers who worked on crafting this revenue alternative to the Senate-passed tax and borrowing revenue package that he expects will receive a vote in the House of Representatives next week.
Along with filling a need for additional revenue, Rep. Paul Schemel, R-Franklin County, said, “it’s bringing into the light of day a lot of appropriations that have over time sort of moved their way off the budget books. So this is also government reform.”
House Democratic Leader Frank Dermody of Allegheny County, meanwhile, is skeptical of the legality of the plan’s tapping of restricted funds to pay for general fund expenses and whether the group’s math is right.
The following is a breakdown of two dozen pieces of the revenue plan that each generate at least $25 million. The 34 items not detailed below each generate anywhere from $24,000 to $24 million. The fund balance shown reflects the amount that existed in the account on June 30, but Moul said there are transfers in and out of some of these accounts on an almost daily basis so the figures are fluid.
Agricultural Conservation Easement Purchase Fund
Proposed transfer: $27 million
Fund balance: $36.7 million
Fund purpose: Created in 1988, this fund was to be used for farmland preservation through the purchase of agricultural conservation easements.
Banking Fund
Proposed transfer: $25 million
Fund balance: $36.1 million
Fund purpose: It provides for the administration of the Department of Banking and Securities and regulation of the financial services industry and are to be used in the event of a seizure or liquidation of a financial institution, association or credit union.
Environmental Stewardship Fund
Proposed transfer: $72.7 million
Fund balance: $104.8 million
Fund purpose: This fund, which is fueled by money that comes in from landfill fees, is to provide for farmland preservation, open space protection, abandoned mine reclamation, watershed protection and restoration, water and sewer infrastructure, and improvement and conservation of state and community parks and recreational facilities.
Hazardous Sites Cleanup Fund
Proposed transfer: $50 million
Fund balance: $80.4 million
Fund's purpose: Created in 1987, this fund is to finance the cleanup and restoration of abandoned hazardous waste sites in the commonwealth.
Keystone Recreation, Park and Conservation Fund
Proposed transfer: $100 million
Fund balance: $147.6 million
Fund's purpose: This is to provide for increased acquisitions, improvements, and expansions of state and community parks, recreation facilities, historic sites, zoos, public libraries, nature preserves and wildlife habitats.
Machinery and Equipment Loan Fund
Proposed transfer: $49 million
Fund balance: $59.5 million
Fund's purpose: Created in 1988, this fund is to provide low-interest financing for machinery and equipment for Pennsylvania businesses to facilitate their growth, competitiveness, and value-added capacity.
Multimodal Transportation Fund
Proposed transfer: $120 million
Fund balance: $189.8 million
Fund's purpose: Created in 2013, this is to provide for additional funding for passenger rail, rail freight, ports and waterways, aviation, bicycle and pedestrian facilities, roads and bridges and other modes of transportation.
911 Fund
Proposed transfer: $40 million
Fund balance: $74 million
Fund's purpose: Created in 2015, this fund, fueled by a surcharge on cell phone bills, is to support a statewide integrated 911 plan.
PA Infrastructure Bank Fund
Proposed transfer: $30 million
Fund balance: $52.9 million
Fund's purpose: Established in 1997, this fund is to make loans to or enter into leases with qualified borrowers to finance the costs of transportation projects and rail freight infrastructure.
File photo/PennLive.com
Public Transportation Trust Fund
Proposed transfer: $357 million
Fund balance:$477.8 million
Fund's purpose: Created in 2007, this is to provide dedicated funding for public transportation to cover public transit agencies' operating costs, capital and asset improvements, and programs of statewide significance.
File photo/James Robinson | jrobinson@pennlive.com
Racing Fund
Proposed transfer: $27 million
Fund balance: $36.2 million
Fund's purpose: This fund is to be used for the regulation of horse and harness racing.
File photo/PennLive.com
Recycling Fund
Proposed transfer: $75 million
Fund balance: $89.5 million
Fund's purpose: Created in 1988, this fund, fueled by a fee on waste disposed at landfills or recycling centers, is for recycling and planning grants, market and waste minimization studies, and public information and education activities.
Small Business First Fund
Proposed transfer: $25 million
Fund balance: $27.5 million
Fund's purpose: This provides low-interest loans for small businesses of 100 employees or less for such projects as land and building acquisition and construction, machinery and equipment purchases, working capital, compliance with environmental regulations and municipal or commercial recycling.
Underground Storage Tank Indemnification Fund
Proposed transfer: $100 million
Fund balance: $224.7 million*
Fund's purpose: Created in 1989, this fund is to provide claim payments to owners and operators of underground storage tanks who incur liability for taking corrective action or bodily injury or property damage caused by a release from underground storage tanks.
* Rep. Dan Moul said this was the year-end balance on June 30, 2017.
File photo/PennLive.com
Volunteer Companies Loan Fund
Proposed transfer: $25 million
Fund balance: $49.3 million
Fund's purpose: This fund provides loans for acquisition and replacement of volunteer fire, ambulance, and rescue company equipment and facilities.
Pennsylvania Professional Liability Joint Underwriting Association
The plan proposes to take $200 million from this fund that was created by state law to offer medical malpractice insurance of last resort for doctors and medical facilities.
Budgetary reserve
The plan proposes to eliminate $189.4 million that was included in the enacted 2017-18 state budget that was put in reserve by Gov. Tom Wolf to ease the state's cash flow problem while waiting on a completed revenue package.
Among the items that would be impacted by cutting out this funding altogether are the $5 million for Capitol Complex fire protection that is paid to the City of Harrisburg; $4 million for the mobile science van program; and more than $1.1 million for mental health services, along with 65 other budget lines that would get trimmed.
Unspent money from past years
The plan includes using $400 million in money that was appropriated in past years but went unspent.
Managed Care Organization Assessment Increase
The plan proposes to use the increase in the annual monetary assessment on managed care organizations that went into effect on July 1 to generate $100 million to help fully fund the state budget.
Redirecting tax dollars to general fund from restricted accounts
The plan calls for diverting $100 million of tax money that is carved out for special funds and redirect to help bring the state's general fund into balance.
VW Settlement
The plan calls for using the $30.4 million that Pennsylvania received from a settlement of a multi-state lawsuit against Volkswagen over the company's diesel emissions-cheating scandal.
Tapping the Pa. Liquor Control Board for more money
The plan also would require an additional $25 million transfer from the Pennsylvania Liquor Control Board from wine and spirit sales, for a total of $210 million.
Imposing a sales tax on online marketplace
The plan proposes to recover more state sales tax from online purchases to generate $31.7 million. The Senate-passed tax and borrowing plan to balance the budget also included this as a revenue generator.
Cutting tax credits
The plan calls for cutting in half funding available for most state tax credit programs but leaves the popular Educational Improvement and Opportunity Scholarship tax credit programs untouched. This is expected to free up $28.3 million.
The group of lawmakers backing this plan insisted that the diversion of money from special accounts to the general fund would have no impact on the operation of programs that rely on funding in those special accounts, shows no favoritism, and leaves enough revenue in the fund to support ongoing expenses.
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