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Citizens Alliance of Pennsylvania -CAP- Report

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Governor Wolf and Senate Republicans are calling on the House to take up the “Fiscal Code” passed on July 27th. This legislation contained tax hikes that would impact anyone with a cell phone or landline and raise heating bills for anyone who relied on natural gas. While the Governor and Senate argue that the Commonwealth is operating on a bare bones budget, the number of earmarks and corporate welfare handouts in budget and fiscal code show that the opposite is the case.Here are several examples of the earmarks:

  • $500,000 shall be used for an antiviolence task force, in consultation with the Office of Attorney General, in a county of the second class A that is also a home rule county.
  • $600,000 shall be used for a community development and remediation project in a city of the third class with a population greater than 6,800 and less than 7,600 during the most recent Federal decennial census.
  • At least $5,000,000 shall be distributed to a hospital in a city of the third class in a home rule county that was formerly a county of the second class A.
  • $1,000,000 shall be distributed to a nonpublic nursing home located in a county of the first class with more than 395 beds and a Medicaid acuity at 1.17 as of August 1, 2016, to ensure access to necessary nursing care in that county and $5,000,000 shall be distributed to a nonpublic nursing home located in a county of the eighth class with more than 119 beds and a Medicaid acuity of 1.14 as of August 1, 2016, to ensure access to necessary nursing home care in that county.

In case you’re curious the $5 million to the hospital in a “city of the third class in a home rule county” is going to a hospital in Sen. Pat Browne’s district. Sen. Browne is primarily responsible for drafting the Fiscal Code. He also included some additional corporate welfare for his district in the form of an “Entertainment Economic Enhancement Program.”

The entertainment enhancement program is a pet project of Senator Browne’s where he is trying to attract big name concert performers to Allentown. According to a 2016 Allentown Morning Call article:

“While the concept is simple, the tax credit structure is not. Detailed in a 15-page addition to the state budget tax code, the law offers promoters of big acts a state tax credit of up to $800,000 per tour for scheduling an act at what the law calls Class 2 or Class 3 venues. A Class 2 venue is any arena or concert facility with at least 6,000 seats that is not in Allegheny or Philadelphia counties, where the state’s biggest venues operate in Pittsburgh and Philadelphia.

“A Class 3 venue is any of the state colleges outside Pittsburgh or Philadelphia, or any venue in a Neighborhood Improvement Zone. It’s not a coincidence that there is just one NIZ, in Allentown, and one venue in that NIZ – PPL Center. Nor is it a coincidence that the biggest tax credit is reserved for Class 3 venues.”

But wait, there’s more!

Not satisfied with a $60 million film tax credit to subsidize Hollywood millionaires, the Senate included a new category of a “Film Production Tax Credit District.” The Districts, up to two of them, must be at least 55 acres, on deteriorated property, contain at least one “qualified” facility and six soundstages…and the list goes on. Based on the list of qualifications, it sounds a lot like the author of that provision already has a recipient lined up to get your money.

While proponents of the film tax credit hype the economic benefits, research has shown that there is no lasting impact from subsidizing Hollywood productions. Furthermore, the tax credits themselves are misused. An in-depth analysis conducted by Public Source found, among other things, that:

Few productions use the tax credit; productions sell 99 percent of all film tax credits to companies that have nothing to do with film or TV. Essentially, the film tax credit is a backdoor tax break for some of the largest corporations and utilities operating in Pennsylvania”

The Governor and the Senate are pressuring Republicans in the House to approve tax increases on hardworking Pennsylvanians to continue funding pet projects and subsidizing out of state entertainment moguls. Instead, the House should go through the budget and fiscal code line by line and cut spending by 4 percent to balance the budget without new taxes.

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