Public Interest Groups Call for Tax Fairness and Equality

Press Center

For Immediate Release


April 18, 2011

Barry Kauffman, 717-232-9951

Public Interest Groups Call for Tax Fairness and Equality

On the steps of the state capitol today, public interest groups assembled calling on Governor Corbett and the state legislature to solve the current state budget crisis in a manner that would preserve essential government programs and make the state’s tax system more fair and equitable. Proposed alternatives would close many of the tax loopholes found in the 111 page Tax Expenditures Budget section of the state budget, and establish a severance tax on the state’s Marcellus Shale gas drillers similar to what they pay in all other major gas producing states.

Common Cause/PA Executive Director Barry Kauffman challenged Pennsylvania’s leaders to “move forward boldly to establish a tax system that is more fair and equitable, as they pursue the arduous task of balancing the state budget.” He said that by addressing only the expenditures side of the budget in their attempt to close the $4.2 billion budget deficit, the legislature and governor were acting irresponsibly. He noted that “by leaving the Marcellus Shale gas drillers off the hook for a severance tax, the state was losing approximately $200 million dollars that could be collected to help solve the budget problems and save extremely valuable public programs and services.” The Common Cause leader, pointing to a supersized $1.1 million check, noted that the gas drillers were winning their public policy battles by spending large amounts on campaign contributions. The $1.1 million check reflected the easily identifiable campaign contributions given to just Gov. Corbett in recent years.

Kauffman noted that serious flaws in Pennsylvania’s governmental and election structures exacerbate the problems of balancing the budget by giving special interests extraordinary lobbying leverage that creates momentum in policy decisions – and too often end up being unfair to, or even harmful to regular citizens. Problems such as the lack of a gas severance tax often are caused by a lack of safeguards in the system, and Kauffman said the legislature should proceed immediately to:

. Enact a law forcing corporations and like entities to fully disclose the expenditures they make to influence the outcome of elections through “independent political expenditures” now permitted under the Supreme Court’s Citizens United decision;

. Pass campaign contribution limits like 39 other states have done to reduce special interests’ influence over elected officials;

. Ban or limit the practice of lobbyists and their principals giving gifts, hospitality, entertainment, travel and lodging to elected officials – and require full disclosure of any permitted gifts; and

. Reinstate the state Sunset law to require the regular evaluation of all state government programs and agencies to carefully eliminate ones that are no longer necessary or redundant, and upgrade those not operating effectively and efficiently.

Representative Greg Vitali and Penn Future’s Jan Jarrett laid out the need for and means of achieving a reasonable gas severance tax. Former representative David Levdansky and Michael Wood of the Pennsylvania Budget and Policy Center pointed to over 100 pages of tax loopholes that permitted large corporations to avoid paying their fair share of taxes. Kauffman went on to note that while Pennsylvania does have a high corporate net income tax rate, over 70% of Pennsylvania corporations don’t pay any tax under this law, and another 12% pay less than $1,000 per year. This increases other taxpayers’ tax burdens. Reverend Sandra Strauss of the PA Council Churches, and Bonita Hoke of the League of Women Voters, demonstrated how the inequities of Pennsylvania’s tax system hurt working class families, and in the current budget cutting climate could decimate programs that are essential for the elderly, disabled, and poor; diminish safeguards that protect the integrity of government and fairness of elections; and potentially damage Pennsylvania’s long-range ability to remain competitive in our high-tech world economy