By the time you read this, we'll know whether or not Governor Wolf garnered enough Republican votes to pass his budget and send it on to the Senate next week.
Past attempts at a compromise didn't pan out (because they weren't actually compromises) and we're now into our fourth month without a budget. School districts and other organizations are left to dip into their reserves or take out loans until a budget is passed. The governor felt that if his budget was presented for a vote by house leaders, Republicans would approve it.
While we're waiting for a budget, I want to share some insight published earlier this week, by Philadelphia Daily News columnist John Baer, on how to get $800 million more in revenue with no tax increase. Baer wrote about things that many of us were unaware of.
Like retailers collecting the state's 6 percent sales tax getting to keep 1 percent of the amount they collect. In the days before the computer and internet, it was intended to help defray bookkeeping and mailing costs.
In 2014 they kept $82.5 million. It is a decades-long practice that about half of the states allow. Pennsylvania is the only northeastern state that allows it and one of only 13 states that does not set a limit on the amount kept by retailers.
Baer wrote that Phil Mattera, of Good Jobs First, a Washington DC-based nonprofit, non-partisan policy research group, studied the issue some years back and found Pennsylvania a national leader, behind only Illinois and Texas, in giving away sales tax revenue. As an example, in 2008 Mattera's study estimated Walmart's "compensation" for collecting sales tax in Pennsylvania was more than $3 million.
Elimination of the 1 percent compensation would put $82.5 million back in the coffers.
Another item in Wolf's plan would tax cable TV, which was estimated to yield $260 million next year. Taxing chewing gum and candy would net another $108 million. Baer mentions that taxing spa treatments, tattoos, tanning and hair removal would add another $157 million. Taxing legal work except for family and criminal law would bring in another $152 million.
Created after the state legalized gambling in 2004, the Pennsylvania Racehorse Development Fund is budgeted to get $253 million. Baer opines, "How about we first develop, as our Constitution mandates, a thorough and efficient education system to help poor rural and urban areas and then develop racehorses?"
Good question John.
Without getting a penalty flag for "piling on" earlier this week, Pennsylvania Auditor General Eugene DePasquale blasted the Pennsylvania Department of Education in an 81-page report as being slow to change, beset by apathy, and mired in what he called "bureaucratic ineptness."
Among other things, it was reported that the department did little or nothing to help improve 561 schools it identified as low-performing two years ago, for not updating its master education plan in 16 years, and for letting a former education secretary collect a $140,000 consulting paycheck for essentially doing no work. DePasquale called it a dereliction of duty.
The report contained 30 recommendations for the department with 500 employees and a $10 billion budget.
These are all items that need to be addressed along with any new budget.
Before a decision is made to tax and spend, an honest effort must be made by Harrisburg to review and correct.