Harrisburg – Oct, 20, 2015 – State Senate Democrats today called on the Pennsylvania state treasurer to “stop payment” on a scheduled disbursement of property tax revenue headed to charter schools. They have sent a letter to state Treasurer Tim Reese formally asking for the withholding of the money.
“Charter schools are seeking gaming tax relief funds based on one legal interpretation, while public schools and many public officials have a different view of the law,” state Sen. Democratic Leader Jay Costa (D-Allegheny) said today. “The treasurer should not release one dime until there is legal clarity and outstanding issues have been resolved.”
Charter schools contend that they are due disbursement from funds generated from gaming revenues. Typically, when a state budget is adopted, charter school funding is deducted from basic education subsidies.
Due to the budget impasse the normal funding stream is not available. The charters say that the law stipulates that since those funds are not available, the funds are then deducted from other state payments. The state is expected to make a $45 million payout to charter schools on Oct. 22, with 312 school districts diverting funds to charter schools.
“All of our schools, including traditional public schools and charters, need to be appropriately funded by the commonwealth,” Senate Democratic Appropriations Chair Vincent J. Hughes (D-Philadelphia/Montgomery) said. “However, we cannot provide special assistance to charter schools while many other school districts are suffering.
“I urge the state treasurer to hold off making payments to charter schools until the budget impasse has been resolved and all schools have funding in place.”
Sen. Jim Brewster (D-Allegheny/Westmoreland) called for the suspension of the payment to charter schools late last week. Brewster said “public schools are facing incredible difficulties because of the lack of a state budget.
“Now, the funding they are getting outside of the basic subsidy is being hijacked and that is wrong.”
Brewster pointed to the situation involving two of his school districts in the Monongahela Valley as examples of inequity. He said that while McKeesport is due $1.2 million in reimbursements, they will only receive $41,000 after charter school funds are deducted. He said that Clairton will have to send its entire $230,000 reimbursement to charters and receive nothing.
“Since so many of our schools are hurting due to the budget impasse, we need to answer important legal questions regarding these funds before they are distributed later,” Sen. Andy Dinniman (D-Chester), Democratic chair of the Senate Education Committee, said. “The bottom line is that both public and charter schools are in need of these supplemental gaming funds – funds that do not go through the normal budget process.”
In the letter to the treasurer, Senate Democrats said they do not believe that gaming fund reimbursements constitute “state payments” and that the state law dealing with disbursement of funds never contemplated a budget impasse.
They say that the statute involving the generation of faming funds and property tax relief define the use of funds disbursed from the property tax relief fund. Senate Democrats say that there is no discretion to shift funds earmarked for tax relief to pay operational costs at charter schools.
“Pennsylvania Race Horse Development and Gaming Act and the Taxpayer Relief Act must be read together in order to establish the General Assembly’s intent for the use of the money in the Property Tax Relief Fund,” the letter says.
Costa said that under the Fiscal Code the state treasurer has the authority to withhold payments from the state treasury.
“No payment can be made without the state treasurer’s warrant and approval,” Costa said. “This is a clear case when the law is murky and public schools are being treated inequitably by laws that did not anticipate a long budget impasse.”
Brewster, who met with the secretary of education and budget secretary yesterday about the issue, said he is very concerned about the short-term financial health of school districts if the funds are diverted.
“Many school districts across the state will bear the burden if these funds are released and they are not compensated,” Brewster said. “Given the outstanding legal issues, the responsible course of action is to stop payment until the conflicting interpretations of the law are reconciled.”
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$1,990 rebate to taxpayers; property taxes eliminated for nearly 2/3 of property owners
Harrisburg – June 24, 2015 – A new property tax plan that would eliminate school property taxes for 2 million homeowners, reduce property taxes by $1,990 for another 1.2 million homesteads and provide a $500 rent rebate for more than 800,000 Pennsylvanians was unveiled today by Senate Democrats.
Under the PA Home Rebate plan, property taxpayers would be eligible for a 100 percent rebate of their school property tax bills up to $1,990 while renters would receive rebates of $500 provided their income is less than $50,000. The rebates would be available annually.
“The plan is simple, straightforward and substantial,” Sen. Jay Costa (D-Allegheny), the Senate Democratic leader said today. “It eliminates school property taxes for 2 million homesteads, makes deep cuts for more than a million more and helps renters.
“Seniors, working men and women and virtually all taxpayers and renters benefit from this approach.”
Costa said the plan drives out more than $4.4 billion in tax and rent relief by shifting the tax burden from a heavy reliance on the property tax to a mix of the Personal Income Tax, Sales and Use Tax and tobacco taxes.
“The plan provides significant tax and rent relief that Pennsylvanians have wanted,” Sen. Vincent J. Hughes, (D-Philadelphia) the Senate Democratic Appropriations chair said. “The $1,990 in relief is based on the average property tax bill in Pennsylvania.
“This is a fresh approach and a departure from the plans on the table because it is not based on a distribution formula and it provides uniformity in relief.”
Gov. Tom Wolf offered a property tax plan as a part of his budget address in March. The House of Representatives advanced their own plan (HB 504) which passed the House earlier this year. Each of those efforts include a complex formula to redistribute revenues.
The Independent Fiscal Office studied the Senate Democratic plan and reported its findings in March. In a letter to Costa and Hughes, the IFO indicated that the average property tax bill In Pennsylvania was $1,990 and the median was $1,608.
“This plan takes an important first step in shifting more funding responsibility for schools to the state and away from the local property taxpayer,” Sen. Lisa Boscola (D-Northampton) said. “While I still support complete elimination of school property taxes, plans like this provide relief to those struggling to pay ever-increasing property taxes.
“Many of us have sought total property tax elimination as our goal, but until that plan can get the necessary votes this is an excellent step forward.”
“For many seniors this is an exceptional approach because it would provide dramatic school property tax relief combined with relief from county or municipal taxes,” Hughes said.
Costa and Hughes said the Senate Democratic Caucus plan includes protections against sharply escalating school district taxes to further protect taxpayers from spikes in local taxes.
Because the plan provides a 100 percent rebate up to $1,990, taxpayers will be inoculated from future school district property tax increases until their tax bill reaches that threshold. In addition, current Act 1 spending caps, which require voter approval of spending above an inflation index, would remain in place. The amount that school districts could keep in reserve would be capped at four percent.
Finally, once Act 120 pension increases plateau and the school funding gap created by Gov. Tom Corbett’s drastic cuts in school funding is filled, school districts will not have to repeatedly raise local taxes to cover costs, they said.
Other elements of the plan include making the relief available as soon as possible via a Short Term Investment Program loan from the state Treasury. Taxpayers would be able to receive the rebate of up to $1,990 by check once they submit documentation that they paid their taxes. The process would be similar to the one that is used to process the rebates for senior citizens under the Property Tax Rent Rebate program, the Democrats said.
Hughes said the plan allows Philadelphia to fashion its own tax relief scheme because it uses a significantly different tax menu to fund its schools.
He said the plan allows flexibility for Philadelphia to lower a combination of taxes. The city currently uses a combination of a high wage tax, cigarette tax revenues, local sales tax and property taxes while most other school districts balance their books using local property tax revenues.
The proposed tax mix that generates the $4.4 billion to pay for the rebates uses a .78 increase in the Personal Income Tax, a 0.6 increase in the Sales and Use Tax and new levies on cigarettes and other tobacco products.
Costa and Hughes both noted that the levies in the Senate Democratic plan are similar to or lower than both the tax menu presented in HB 504 and the Governor’s proposal.
The senators said that they are open to discussing the proper mix of revenues to fund significant property tax relief for all Pennsylvanians.
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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.
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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.”
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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
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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.”
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