Surprise $3 billion tax cut vote kicks off budget negotiations in Harrisburg with a bang

Some Pennsylvania Senate Democrats are crying foul after a Republican proposal to cut taxes totaling roughly $3 billion a year was put forward and passed in roughly 24 hours. The bill passed the Senate with a 36-14 vote.

The bill would cut the personal income tax rate from 3.07% to 2.8% and would eliminate the tax on electricity. It’s estimated the tax cuts would cut revenue by roughly $3 billion per year.

Republicans were able to move so quickly — in spite of rules requiring bills to be read three separate times before passage — by using a procedural maneuver. The tax cuts were introduced during a Senate Rules committee meeting on Monday in the form of an amendment to a bill initially intended to create a tax credit for Emergency Medical Technicians. That bill had already been read twice.

“The bill is being rushed through the system in, what, 24 hours?” Senate Appropriations minority chair Sen. Vincent Hughes (D-Philadelphia) said in an interview. “That’s a major impact on the state’s budget. It needs to be part of overall budget negotiations, keeping in mind we have a court order to fix the funding of our public education system.”

The bill passed Hughes’ committee on party lines Tuesday before going to the floor.

Erica Clayton-Wright, a spokesperson for Senate President Pro Tempore Kim Ward (R-Westmoreland) didn’t see an issue with the process.

“They had almost 24 to 48 hours to review the bill. How long did they need,” Clayton-Wright told the Capital-Star. “This is the people of Pennsylvania’s money. So if the intent is for the money to go back to the people who gave it to us, then it really shouldn’t need long to review.”

Sen. Majority Leader Joe Pittman (R-Indiana), said at a press conference Tuesday that the state’s rainy day fund was proof that the state could absorb the tax cuts.

“I get tired of hearing that we have to use that money to invest in other things,” Pittman said. “If you want to use some of that rainy day fund to invest, let’s invest in the taxpayers.”

In their criticisms of Gov. Josh Shapiro’s budget proposal, GOP lawmakers have expressed particular displeasure with the budget’s proposed future withdrawals from the state’s rainy day fund. 

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While eight Democrats voted with every Republican in favor of the bill, Hughes noted that other Senate Democrats may not necessarily be against tax cuts, but want time to consider them as a broader part of budget negotiations.

“There’s no willingness to rule out tax reductions,” Hughes said. “Senate Democratic priorities would make sure those reductions are very focused on regular, working people in Pennsylvania. But process is relevant. It can’t be something you just run up within 24 hours.”

Two amendments put forward by Sen. Art Haywood (D-Montgomery) aimed at reducing taxes specifically for lower-income Pennsylvanians were rejected. 

Hughes and other Democrats opposing the bill on the floor noted the tax cut proposal is coming while the legislature has a mandate to increase funding to education. In February, a Commonwealth Court judge ruled that Pennsylvania’s school system was unconstitutionally underfunded.  Shapiro’s proposed budget includes an over $1 billion increase in education funding.

The tax cut bill is unlikely to pass the Democratic-controlled House. It is more likely an opening salvo in budget negotiations.

“If you remember after the budget address, the Governor said, ‘well, what’s your plan?’ Ward said at a press conference Tuesday. “Well, this is our plan. Our plan is to give back to the families of Pennsylvania and the businesses that have paid the taxes.”