Pennsylvania Senate narrowly approves $550 million tax bill

The Pennsylvania Senate narrowly approved a bill this morning that would produce $551.5 million in new taxes.

The bill passed in a 26-24 vote following a lengthy floor debate that laid bare the geographical and political divisions among and between Republicans and Democrats in the GOP-controlled Senate. Those divisions are sure to manifest themselves further in the GOP-controlled House, where the bill and other budget-related legislation, are headed to uncertain fates despite the state’s dire need for more tax money to pay for the $32 billion spending bill the Legislature overwhelmingly approved last month.

The tax bill would:

  • impose higher consumption taxes on users of natural gas, electricity and phones to generate $405 million in net new revenue following $20 million deduction for low-income heating assistance and $20 million for natural gas pipeline construction for homes and business.
  • add a severance tax on the volume of natural gas extracted from the Marcellus Shale region to generate $100 million.
  • forces internet companies like Ebay to remit sales taxes on good purchased through their site to generate $43.5 million.
  • adds a new levy on fireworks to raise about $3 million.

In a separate vote, the Senate also approved another bill that would would transfer $200 million from a surplus account controlled by a state-created nonprofit that provides medical liability insurance to health care professionals and entities that cannot get it on their own. A vote on a third bill would allow the state to borrow $1.3 billion from the state’s annual allotment of tobacco money that comes in from a 1998 legal settlement.

Those bills, coupled with a future vote on gambling expansion ideas, are expected to close the state’s lingering $2.2 billion deficit.

More to come.

steve.esack@mcall.com

Twitter @sesack

717-783-7309

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