HARRISBURG, JULY 22, 2009 – State Sen. Wayne D. Fontana (D-Allegheny) today called on his colleagues to look at other ways to restore or retain programs that are critical to Pennsylvania’s fiscal health, without increasing the personal income tax (PIT).
“I am not opposed to making cuts in order to balance this budget, but we need to make smart, responsible decisions,” Fontana said. “Many of the proposed cuts impacted by this budget are not smart. They are misguided, and they jeopardize the very programs that have ensured we are not in a worse economic position—programs that would help us on the road to recovery during this recession.”
The Senate Republicans acted earlier this week to amend House Bill 1416, using a number of one-time only revenue sources to remove the deficit from this past year’s budget before approving a $27.14 billion budget for 2009-10. The proposal, however, cut funding for early childhood education, higher education, libraries, tourism and small business development while entirely eliminating funding for science and math programs, public television and economic development programs.
Fontana is suggesting that his colleagues look at proposals to temporarily freeze the phase out of the Capital Stock & Franchise Tax, to levy taxes on extracting natural gas from the Marcellus Shale, to expand the tobacco tax to smokeless tobacco (Pennsylvania is the only state that does not impose this tax), and to consider closing the so-called “Delaware corporate tax loophole.” It is estimated that those four proposals alone could generate $1.27 billion in revenues over time.
Speaking on the Senate Floor earlier this week, Fontana said that some of the proposed cuts restrict job creation, especially in private industries, and stifle revenue for the Commonwealth. Considering other revenues sources would allow for the restoration of funding to a variety of programs – including tourism, support of our libraries, grants to the arts, funding for the Small Business Development Centers, and other economic development programs.
“We cannot hope to grow our economy by making decisions that will stunt its growth,” said Fontana. “Small business is one of the largest economic drivers in the state. It is part of our foundation and is essential to job creation and development of new business, yet we cut funding for Small Business Development Centers.”
The state’s travel and tourism industry is also under the knife. According to Fontana, Pennsylvania’s tourism industry is the fourth largest in the nation and is the second largest industry in the state, supporting hundreds of thousands of jobs and generating billions in tax revenue. Even funding for cultural programs, such as arts and museum monies are irresponsibly cut, Fontana said, as they too generate revenue and maintain jobs.
“The dollars we invest in these programs are modest in comparison to the rest of the budget, and they produce large returns,” Fontana said. “It makes no sense, in an unstable economy, to slash programs that generate revenue and sustain jobs.”
Fontana also criticized the plan to reduce funding for libraries. During troubling economic times, he said, people rely more and more on libraries to seek and apply for jobs, apply for unemployment and find health care and social service referrals.
“Libraries are the foundation of the educational system in this country,” Fontana said. “It is disheartening to hear that we are protecting education, but at the same time we are cutting funding to one of its core components.”
Fontana also advocated fully funding the PA Film Production Tax Credit, which generates millions of dollars in revenue from increased hotel room and vehicle rentals, among other film production related business.
“The film business is one of the few industries that is recession-proof,” Fontana said. “We should be encouraging the growth of business, not eliminating opportunities for it to move forward.”
Consideration of just a few of the proposals would allow for the increase in funding, or restoration of many of these programs. The Senator is advocating increased funding for Tourism, Small Business Development Centers, PHEAA, Pre-K Counts, Head Start, and Public Libraries. He is also proposing restoration of funding to New Communities, science and math programs, the Arts and public television.
“We need to make smart decisions and smart investments in Pennsylvania’s future,” Fontana said. “It is important to make fiscally responsible cuts to the budget, but it is even more important that we do what we can to ensure no additional burden to the taxpayers.”