Harrisburg – June 2, 2015 – Legislative Democrats gathered in the state Capitol for a news conference today to highlight the broad and deep support in the General Assembly for legislation that would create a new $1 billion natural gas extraction tax for education.
Senate Democratic Leader Jay Costa (D-Allegheny) and Democratic Appropriations Chair Vincent J. Hughes (D-Philadelphia) along with House Democratic Leader Frank Dermody (D-Allegheny), Democratic Whip Mike Hanna (D-Clinton) and Democratic Appropriations Chair Joe Markosek (D-Allegheny) in concert with Democratic members of both the Senate and House called on Republicans to move the education investment plan.
In his March budget address, Gov. Tom Wolf proposed a new Marcellus Shale gas extraction tax of 5 percent, with a 4.7 cent tax on volume. The plan contains a provision to ensure that the distribution of Act 13 fee revenue to communities is maintained.
“There has been far too little talk and too many delays in considering a gas extraction tax plan that would raise $1 billion for education,” Costa said. “The Republicans in both the Senate and House seem hesitant about addressing the substance of the governor’s proposal and uninterested in examining responsible education investment proposals.”
The governor’s plan would generate an estimated $1.015 billion in fiscal 2016-17.
“The severance tax proposed by the governor is reasonable and responsible and it is in line with the tax rates of the top 10 gas producing states,” Dermody said. “Republicans have sidestepped the adoption of a reasonable energy tax to fund education investments and have instead moved political issues that do nothing to help students.”
The lawmakers said the $1 billion in new revenues would be used to invest in basic and higher education and help replace dollars slashed by former Gov. Tom Corbett.
“The governor’s plan helps backfill the revenues that were lost when school funding was cut during the Corbett administration,” Hughes said. “Students, teachers, administrators, parents and taxpayers need help now and will receive a boost if the new investment plan for education is approved.
“The support for moving a plan in both the Senate and House is wide and deep and is illustrated by the number of members of both chambers who turned out today to publicly support using energy taxes for education.”
The plan maintains the Act 13 fee distribution to communities impacted by drilling, at the highest level to date ($225 million).
“A natural gas extraction tax is a substantive, meaningful way of providing for education, while maintaining the payments to communities that are affected by energy extraction,” Markosek said. “The additional investment for education would be paid by an industry that is engaged in a very profitable activity.”
Costa and Hughes both said that they believe that there is a will in the state Senate to consider a shale energy tax that is earmarked for education.
The senators said that there is far too much disinformation concerning shale extraction being distributed by the industry and threats by the industry to pull out of the state if a reasonable tax were to be imposed are counterproductive.
“We need an industry that is healthy and productive enough to sustain robust job growth,” Costa said. “The responsible tax that the governor has proposed will not hobble gas extraction.”
Hughes said that the gas drilling is very lucrative. Last year, he said, the value of gas severed from Pennsylvania wells was $11 billion up from $4 billion in 2011.
“The major gas producers in Pennsylvania have indicated that they expect substantial growth this year,” Hughes said. “This doesn’t sound like an industry that is ready to vacate.”
Hanna said that members of the House Democratic caucus have been strong advocates of an energy extraction tax because they, like their constituents, “see the relationship between an energy tax on a Pennsylvania-based resource to invest in Pennsylvania’s most valuable resource, our children.”
The current Act 13 fee is insufficient, according to Markosek and needs to be adjusted. The Act 13 fee is the equivalent of a rate of less than 2 percent.
“Our current impact fee is stagnant. The commonwealth is not sharing in the growth of the natural gas industry,” Markosek said. “Pennsylvania taxpayers deserve a better, more responsible, approach that is fair to the industry and funds key investments in education and environmental protection.”
The Democrats said that they are willing to consider all responsible proposals. They said that members of both the Senate and House have offered plans that would be good starting points of discussion but insisted that the lion’s share of funds generated from any of the plans considered be earmarked for education.
They said that they would insist that a reasonable energy extraction tax be included during upcoming budget discussions.
-30-
Contact: Stacey Witalec
Telephone: 717 877-2997
Email: switalec@pasenate.com
Contact: Bill Patton
Telephone: 717 787-3566
Email: BPatton@pahouse.net
Harrisburg – Dec. 3, 2014 – Senate Democratic Leader Sen. Jay Costa (D-Allegheny) and Senate Democratic Appropriations Chair Sen. Vincent J. Hughes (D-Phila.) said the $ 2 billion plus budget deficit disclosed at today’s Mid-Year Budget Briefing should be laid at the feet of Gov. Tom Corbett and his Republican legislative allies.
The briefing, hosted by the Corbett administration, is an annual December event that provides a budget status report to legislative leaders.
[hdvideo id=119]
Costa and Hughes’ released the following statements in reaction to today’s disclosure:
Sen. Jay Costa:
“The Republicans who created the $2 billion-plus deficit need to be accountable and take responsibility for closing this gaping hole. This was all so predictable. Senate Democrats couldn’t have been clearer about the budget gimmicks and short-term fixes that were contained in last year’s Republican budget.
“We said that the budget was badly flawed and that’s why we were so strongly opposed to the spending plan. The Corbett administration and Republicans in the House and Senate need to acknowledge their role in making Pennsylvania’s fiscal house a shambles.
“The mid-year briefing was a sad closing commentary on failed, short-sighted policies. It’s clear that the Corbett administration failed to have a plan on how to manage resources and provide strategic investments to move Pennsylvania forward.”
Sen. Vincent Hughes:
“The cause of the problem is simple: Over the past four years Republicans failed to articulate and implement a jobs plan that makes growing our economy a priority. Going from ninth to dead last among all states in job creation in four years demonstrates how little attention has been paid to actual state of Pennsylvania’s economy.
“What is even more frustrating is, despite their lack of vision, creativity and effective policies, the Corbett administration and the Republican-controlled House and Senate still found a way to reward their corporate friends with billions in tax cuts at the expense of education, social safety net programs and the middle class.
“Senate Democrats have predicted this result since year one of the Corbett administration. Unfortunately, the Republican majorities in the House and Senate were willing co-conspirators in the pilfering of the commonwealth’s finances. Now we must focus on the arduous task of placing Pennsylvania back on strong financial ground. We look forward to working with Governor-elect Wolf and the new leadership in the House and Senate Republican caucuses to make sure that happens.”
-30-
Media contact: Stacey Witalec, 717 877-2997
Senate Democratic Caucus and Sen. Jay Costa
switalec@pasenate.com
Ben Waxman
Office of Sen. Vincent J. Hughes
215-266-4598
# # #
Harrisburg – July 10, 2014 – Members of Senate Democratic Leadership issued the following statements concerning Gov. Tom Corbett’s line-item veto of funding for the General Assembly and his renewed call for lawmakers to consider pension reform:
Senate Democratic Leader, Sen. Jay Costa (D-Allegheny) said:
“Governor Corbett’s action today clearly illustrates the Republican gridlock and dysfunction that has descended on state government. It is hard to fathom what Governor Corbett believes he can achieve. This is a Republican budget mess, crafted solely by Republicans and delivered to the citizens of Pennsylvania by a party that lacks leadership at the top.
“The line-item veto of a portion of the General Assembly’s funding does nothing to address the needs of Pennsylvania. His actions today will not help schools students, job seekers or the vulnerable in need of assistance. The budget, and his actions, are politically-driven and do not solve problems.”
Senate Democratic Appropriations Chair, Sen. Vincent J. Hughes (D-Philadelphia/Montgomery) said:
“The General Assembly is a co-equal branch of government and should not be held hostage to the ideological whims and political demands of a governor who is struggling to find his footing in an election year.
“His renewed call for the legislature to revisit a pension reform plan that could not navigate its way through the House, let alone the Senate, epitomizes a Republican Party that is bankrupt of ideas trying to push a pension plan that will bankrupt Pennsylvania’s taxpayers.”
Senate Democratic Whip, Sen. Anthony H. Williams (D-Philadelphia/Delaware) said:
“The governor’s actions today, and his indecision and dawdling over the last ten days, reinforce the need for Pennsylvania to go in a new direction. There is no question that we need leadership now because we are going the wrong way under Governor Corbett.
“The budget that was passed is filled with gimmicks and accounting tricks, many of which the governor himself outlined. Renewing debate on a pension plan that is short-sighted and ill-constructed combined with a line-item veto of legislative funds will not force the General Assembly to buckle and act against the interest of the citizens of Pennsylvania.”
-30-
HARRISBURG, March 12, 2014 – State Senate Democrats today said they would save Pennsylvania taxpayers billions of dollars and solve the state’s pension problem if their proposal to further reform pension rules, refinance billions and help school districts avoid escalating payments is adopted.
Senate Democratic Leader Jay Costa (D-Allegheny); the Democratic chairman of the Senate Finance Committee, Sen. John Blake (D-Lackawanna), Senate Whip Anthony H. Williams (D-Philadelphia); the Democratic chairman of the Senate Appropriations Committee, Sen. Vince Hughes (D-Philadelphia); and Sen. Larry Farnese (D-Philadelphia) unveiled the caucus’ proposal during a briefing with Capitol news correspondents.
With the State Employees’ Retirement System and the Public School Employees’ Retirement System drowning in a sea of underfunding approaching $50 billion, the Senate Democratic proposal would refinance $9 billion of that, further reform the state pension law to stop charter schools from receiving double-dip state reimbursements, and lower the collars on state and school district payments to provide short-term budget relief while also making it easier to manage future cost increases.
“The pension reform plan we are suggesting is smart and innovative. It saves money and creates a plausible responsible fiscal roadmap for the future,” Sen. Costa said. “Refinancing $9 billion in existing unfunded liabilities would decrease long-term payments by $24 billion. Over the next five years, it would save school districts $600 million and the commonwealth $1 billion.”
The Democratic Senators said they are making this proposal because it would avoid the dangers posed by Gov. Tom Corbett’s pension proposal, such as:
- $2 billion in additional payments over the next four years, including $550 million more in the 2015-’16 state budget
- $5 billion more in unfunded pension liabilities, and
- The camouflaging of increased future costs that could add millions more to the pension crisis.
Sen. Blake repeated the Democratic Caucus’ mantra that time is of the essence for these critical changes to happen.
“If we continue to delay our responsibility to fulfill our fiduciary requirement and deliver what has been promised in retirement to thousands of educators and public employees, it will be taxpayers, their children, and their children’s children who will have to pay the bill,” Blake said. “We cannot allow that to happen.
“The Corbett administration has already refinanced billions in debt to make a bad situation better when it floated nearly $4 billion in bonds to restore Pennsylvania’s unemployment compensation reserves in 2012. We must do the same with pensions,” the Lackawanna County Democrat said.
Senate Democratic Appropriations Chairman Vince Hughes urged bipartisan support for the caucus’ proposal.
“People from across the political spectrum are, and have been, educators and state employees. They are depending on us to fix this growing problem and this is the solution we need,” Hughes said. “Republicans and Democrats in the General Assembly must work together to get this idea to the governor’s desk.”
Sen. Williams said he believes fiscally responsible lawmakers will especially like the proposal to eliminate the current practice that allows charter schools be reimbursed by the state for pension payments that are completely paid for by school districts.
“This has been a good deal for charter schools, but the set up is hurting school districts, taxpayers and students across the state,” Williams said. “Making this change will significantly reduce school district pension payments because it will eliminate the 50 percent reimbursement that charter schools now receive after districts pay the escalating pension bill.”
And, Sen. Farnese said it is important for the commonwealth to continue its defined benefits pension system because it requires financial professionals to manage contributions.
“Too many people who are approaching retirement don’t have the nest eggs to guarantee them the security and independence they need to do the things they dreamed of doing when they were working,” Farnese said. “Defined benefit pensions are still the most efficient way to save for retirement. Moving away from that system will only hurt the financial security of future generations.”
The National Bureau of Economic Research in Cambridge, Mass., issued a report in February indicating that half of the households where people are on the cusp of retirement (65 to 69 years old) have retirement accounts of $5,000 or less.
-30-
Harrisburg – February 20, 2014 – Senate and House Democrats said today that Gov. Tom Corbett’s budget speech and follow up opinion pieces and interviews have painted a picture of Pennsylvania that is blurry, inaccurate and badly in need of correction.
Senate Democratic Leader Jay Costa (D-Allegheny), Sen. Vincent J. Hughes (D-Philadelphia) Democratic chair of the Senate Appropriations Committee and House Democratic Policy Chair Rep. Mike Sturla (D-Lancaster) were joined by other Senate and House Democrats to raise questions about assertions made by the governor and to unveil a new fact-check website.
“The governor’s claim that ‘Pennsylvania has turned a corner’ and is ‘now ready to hit full economic stride’ is a distortion that is in need of correction,” Costa said. “Under this governor, Pennsylvania has not turned the corner on job creation, education, health care or budget management. We just keep going down a one-way street the wrong way.
“I am concerned about the view from the governor’s office because it is not the same as what most Pennsylvania families are seeing.”
[hdvideo id=101 ]
Given the governor’s slanted view of the problems that face Pennsylvania, Democrats said that it was important that citizens can access objective information. That’s why they have produced a new website where the governor’s claims can be reviewed. The website can be found at www.checkthefactsgovcorbett.com.
“The governor has made job, deficit, health-care and education claims that are distorted,” Hughes said. “The citizens of Pennsylvania need an honest appraisal of the problems that we face and a roadmap that takes us in a new direction.”
“In his employment claims, Governor Corbett fails to mention the 20,000 education jobs lost, the health care jobs that would be created under Medicaid expansion, and that our college grads are fleeing PA for jobs created in our neighboring states all while our unemployment rate is consistently above the national rate.” Sturla said. “He continues to throw money at defending the Tea Party backed policies he’s championed.”
Specifically the Democrats questioned the governor’s assertion that 150,000 private-sector jobs were created. They said that he fails to acknowledge that Pennsylvania has a 180,000 jobs deficit relative to federal economic growth and we’ve moved from seventh to 48th in job creation since Corbett took office.
The Senate Democrats also disputed the governor’s claim that he has invested in education.
“Since the governor took office, he cut $1 billion from education, failed to increase the basic subsidy, treated less affluent districts poorly and ended a long-term funding equity plan that would have rectified funding disparities,” Costa said. “The governor’s new-found election year desire to invest in education cannot overcome the massive problems he caused for schools and taxpayers.”
Hughes said that Corbett has also failed to fully explain his unconscionable decision to by-pass Medicaid expansion and instead is rely on a problematic private insurance-based health care proposal.
The West Philadelphia lawmaker said that the governor’s failure to expand Medicaid “costs $400 million, prevents 500,000 Pennsylvanians from accessing health care and keeps 35,000 from job opportunities.”
Hughes also questioned the governor’s budget balancing saying that “the governor used one-time gimmicks, an inflated growth rate and policy tricks that add billions to the unfunded pension liability to make the $1.2 billion deficit disappear.”
Costa said that many states are examining ways of investing or returning budget surpluses this year and are still not dealing with fiscal despair.
“For the fourth year in a row, under this governor, we’ve had to struggle with revenues because we have not created an environment that is conducive to economic development and job creation,” Costa said. “Many of our surrounding states have invested wisely, grown their economies and regained their fiscal health, while we have been stuck in reverse and going the wrong direction.”
The Democrats said that the narrative that the governor has been pitching across the state since his budget address is an election-year ploy to cover a four-year record of failed economic, job, health and budget initiatives.
###
