By House Speaker Mike Turzai (R-Allegheny)
Gov. Tom Wolf once again is pushing his fiscally irresponsible, job-crushing Restore PA proposal. He wants to borrow $4.5 billion at a cost to the taxpayers of $6.5 billion in principal, interest and fees. This debt-financed “boondoggle” is to be allocated at the whim of a new government board and paid for by yet another job-killing tax on natural gas production. Keep in mind, the state already imposes an impact fee on natural gas production and levies business taxes on these employers.
Debt That Would Cripple the Commonwealth
We must be clear about what Restore PA really is: a $4.5 billion bond issue that will cost $6.5 billion to pay off by the next generation of Pennsylvanians. The true cost could be even higher, if interest rates rise, if severance tax revenue falters, or if Pennsylvania’s credit is downgraded.
Under my tenure as Speaker of the House and Leader, our team has led the effort to reduce the burden that the Commonwealth’s debt places on Pennsylvania taxpayers. We have lowered the state’s Redevelopment Assistance Capital Program (RACP) debt ceiling by nearly $1 billion. We also enacted Act 43 of 2019, which requires the principal for new state debt to be repaid in equal amounts over the term of the bond. Previously, the state used a repayment schedule that featured lower principal payments in the first few years, costing taxpayers more in interest payments.
Over the past 10 years, we have increased annual state contributions to the Public School Employees’ Retirement System. In this budget year alone, the state is contributing over $2.6 billion into the teachers’ pensions, meeting our actuarily required contribution. Combined with local tax contributions enabled by the state, taxpayers are contributing over $4.6 billion annually to the teachers’ pensions. And we have reformed the public pension system to limit the risk that future Pennsylvanians would suffer under an unmanageable pension debt.
Still, as the current economic expansion becomes the longest in American history this month, we have a great deal of work to do to ensure that Pennsylvania’s finances are as healthy as the taxpayers of this state deserve. This is not the time to go even deeper into debt, or to further mortgage the future of the Commonwealth to provide Gov. Wolf with a slush fund to ride out his term.
A Better Solution
House Republicans contend that our infrastructure needs can best be met working with the private sector in the form of public-private partnerships, tax incentives, and a reasonable – not punitive – regulatory structure. Further, we have existing tax revenues and programs that directly pay toward infrastructure improvements.
House Republican colleagues and I proposed the Energize PA program, a package of legislation designed to stimulate billions of dollars in private sector infrastructure investment throughout the Commonwealth. Energize PA would help unlock our state’s full potential, stimulating potentially billions of dollars of investment in manufacturing facilities on abandoned sites and providing thousands of family-sustaining jobs for our skilled tradespersons and others.
We recognize that our natural gas industry already pays its fair share of taxes and has provided an economic lifeline to many struggling families, towns and counties in our state. The natural gas impact fee has already generated $1.7 billion in revenue since 2012, far more than is generated by traditional severance taxes in our neighboring states of Ohio and West Virginia. Natural gas producers and landowners have also paid an additional $5 billion in income tax since the Marcellus shale boom began. No other industry is singled out with a specific tax on their activity. While the banking and insurance industries have industry-specific taxes, they do not pay business income taxes.
Unlocking the Potential of Natural Gas
Pennsylvania has already benefited immensely from the boom in natural gas extraction, and House Republicans are dedicated to building on those gains rather than endangering them.
Residential natural gas customer costs have fallen over the past 10 years, for a $1,200 annual savings per household. Along with reduced electricity costs, Pennsylvania families have saved a cumulative $16.2 billion on their utility bills since 2008, largely thanks to increased natural gas production. Billons of dollars have been paid in royalties to landowners in our state.
Tens of thousands of well-paying, family-sustaining jobs have been provided by the shale boom, with billions of dollars in industrial investment to capitalize on the lower cost of energy and the manufacturing potential of natural gas. This year in Beaver County there are over 6,500 skilled tradespersons working on the construction of the Shell Cracker Plant, which is the largest construction project in North America. We want to see those types of investments all over the state.
Natural gas has allowed our state to excel in reducing greenhouse gas emissions. Natural gas usage in power generation has driven down emissions of volatile organic compounds (VOCs) by 51% according to the Department of Environmental Protection. Sulfur dioxide emissions are down 82% and nitrogen oxide levels have dropped by 72%. Overall greenhouse gas emissions in power generation are down over 40% since 2005.
All of these achievements were accomplished without the need for taxpayers to underwrite a redundant government program. And they were all private sector driven.
We need to refrain from debt riddled approaches in Pennsylvania to maintain our strong and stable footing. We do not want to become Illinois, California or New York. Further, we want to entice more family-sustaining jobs throughout the Commonwealth of Pennsylvania long into the future.
Representative Mike Turzai
Speaker of the House
Pennsylvania House of Representatives
Media Contact: Neal Lesher
717.260.6495 (office) 717.507.9240 (cell)