Pennsylvania

Highers Taxes on Natural Gas, Electricity & Phone Service to Cover $2.2B Gap in Pennsylvania Budget Plan

Highlights of Pennsylvania Senate's $2.2B revenue package

The Pennsylvania Senate is advancing a revenue package to patch a more than $2 billion hole in the state's $32 billion budget for the fiscal year that began July 1. Final votes are expected Thursday, although it could face opposition in the House of Representatives before it reaches the desk of Democratic Gov. Tom Wolf.

Here are details:

Natural Gas Production

The state would raise an estimated $100 million a year by imposing a new tax of 2 cents per thousand cubic feet of natural gas from the Marcellus Shale, the nation's largest natural gas field. That would raise significantly less than what Wolf had originally sought. In February, he proposed a 6.5 percent tax on the value of the production. In 2015, he had proposed a 5 percent production tax, plus 4.7 cents per thousand cubic feet.

Borrowing

The Senate plan would borrow $1.3 billion against future revenues that Pennsylvania will receive from its share of a landmark 1998 multistate settlement with tobacco companies. With interest and borrowing costs, that could mean Pennsylvania will repay $2 billion over 20 years.

Natural Gas Service

A tax on natural gas utility service would be imposed at 5.7 percent, or $5.70 on a bill of $100. It was a 5 percent tax when it was eliminated starting in 2000. Natural gas is Pennsylvania's most prevalent home-heating fuel, used in more than half of the state's roughly 5 million households. It also presumably would be a growing revenue source as the number of natural gas-heated households rises.

Electric Service

A tax on home electric bills would rise to 6.5 percent from 5.9 percent currently.

Telephone Service

A tax on home and cellular telephone bills would rise to 6 percent from 5 percent currently.

Online Sales

Pennsylvania's 6 percent sales tax would extend to sales in online marketplaces run by third-party vendors.

Gambling

The Senate's revenue plan counts on $200 million from an expansion of casino gambling in Pennsylvania, already the nation's No.2 casino state.

Senate Republicans have had differences with Wolf and House Republican leaders. Gambling legislation brokered by Senate Republicans would hinge on Pennsylvania's casinos being able to bid on a satellite casino license allowing up to 700 slot machines and 100 table games at a new facility, and paying licensing fees to operate casino-style gambling on websites and mobile applications.

Transfers

The state would take $200 million from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association, an organization created by state law in 2002 to offer medical malpractice insurance. The association sued in federal court to block the state from borrowing that amount in the recently ended fiscal year.


Source: Senate Republicans 

Copyright AP - Associated Press
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