by Emily Greene | May 15, 2024

At last! Something positive to come out of Harrisburg!

Last week, the Pennsylvania Senate passed transformative legislation through the chamber that would reduce personal income tax and allow you, the taxpayer, to save on energy costs.

This legislation would reduce personal income tax from its current 3.07% to 2.8%, which is significant not only to us as Pennsylvania residents, but certainly would make our Commonwealth much more attractive to others throughout the nation. As a region that continues to see population decline, this has the potential to improve the Keystone State’s representation in Washington, D.C. come next census if this legislation is enacted and maintained. A quick look throughout the country shows states with competitive tax rates are where the masses tend to migrate, and we certainly are in need of an infusion of citizens after nearly five decades of outbound migration.

These tax cuts will save taxpayers $3 billion dollars in the first year and roughly $13 billion over the next five years. This is a far cry from the additional $3 billion in tax increases needed by the Governor to cover a portion of his preposterous budget proposal, but it’s certainly a step in the right direction.

Additionally, an elimination of the Gross Receipts Tax on energy would help bring down our relentlessly rising energy prices that continue to grow, despite our abundance of resources here in Pennsylvania. This very important piece of the puzzle would not only keep more money in our wallets but could (with improvements to permitting) unleash Pennsylvania’s energy sector to the benefit of all citizens.

This critical legislation, along with reductions to corporate income tax rate and expansion of net operating loss deductions, can put the Commonwealth back on track. In this economy, we’re taxed out—and we all want to see our communities once again thrive!

Of course, what goes up, must come down.

Unfortunately, last week’s session saw the advancement of prevailing wage legislation.  Senate Bill 841, introduced by Republican Senator Frank Farry, would make our infrastructure projects even more expensive—and take a toll on your pocketbooks. Local and state government projects are required by law to be awarded to the lowest bidder. This process provides that the contract quotes are sealed as to not have a bidding war and the government entity funding the project must choose the lowest cost. This process, referred to as prevailing wage, sets, for lack of a better term, a minimum wage for these public projects. Despite what a company may pay their employees for regular day-to-day work, prevailing wage sets a rather high bar on payment for labor costs, which almost assuredly cost more to the company doing the work and the taxpayers paying for it. The theory behind prevailing wage is to make the bidding process “fair” by having an across-the-board wage, while satisfying the demands of labor unions for skin in the game. What it really ends up doing is making our infrastructure projects far more expensive, while often times being awarded to companies who are not as efficient in their work, which leads to even more expenses paid out by the hardworking taxpayer. Senate Bill 841 expands upon this concept by preventing split wage rates that save taxpayers’ dollars while still providing a more than fair wage for work.

We as Pennsylvania taxpayer watch dogs must continue to encourage the Senate to do everything in their power to prevent this legislation from moving forward. Tremendous strides made in protecting Pennsylvanians with historic tax relief should not be countered with ineffective legislation that raises costs and ultimately hurts taxpayers.

At Americans for Prosperity-PA, we’re working each day to represent you and yourinterests in Harrisburg. There’s a special interest group for every association, professional group, and interest group in Harrisburg—and Americans for Prosperity works to serve the interests of you, the hardworking taxpayer.

Join our movement for more today by heading to Sign your name to our petition to urge House Democrats to take action on the Senate’s historic tax cuts, and join us as we hold accountable members of the Senate who voted to support dangerous prevailing wage legislation. We can do better, Pennsylvania. Let’s incentivize more Pennsylvanians to remain in the commonwealth.

This is Emily Greene, Deputy State Director with Americans for Prosperity-PA.