Since I proposed my budget for fiscal year 2008 last Tuesday, I have heard strong praise and criticism for the initiatives it contains. I think it's enormously important, however, that we go beyond the rhetoric in order to balance the real tax impact of these proposals on ordinary Pennsylvanians against the benefits they will experience.
This budget does propose new taxes that would be levied on most of our citizens, including a sales-tax increase. But a substantial portion of the new sales-tax revenue would be used to cut nearly $1 billion in property taxes, or about $186 per household, this year -- a full year ahead of schedule. This is in addition to the $1 billion in property-tax relief from gaming funds that will kick in next year. If you add the sales-tax swap, a trash-disposal fee increase, and an energy assessment, the net result of my proposal would have the average homeowner paying six dollars less in taxes.
One caveat is that if there is a smoker in the house, they would pay an additional $22 each year due to the 10-cent-per-pack tax increase on cigarettes, so a smoking household would end up paying an average of $16 more a year in taxes. If the Legislature enacts the conservation measures in my energy independence strategy, even these homeowners would save because average household utility bills would drop by $70 a year.
What's more, my proposal would save taxpayers $1.7 billion as we work to transfer the cost of maintaining our roads and bridges to private industry and the big oil companies that are profiting with our hard-earned money.
Based on recommendations from the Transportation Reform Commission, I propose to fund our vital transportation systems by leasing the turnpike while maintaining control over toll increases and road-repair schedules, and by taxing the profits of oil companies who are making staggering profits in Pennsylvania and using accounting loopholes to avoid paying taxes. My plan ensures that the tax on oil companies couldn't be passed on to drivers at the pump.
The fact is that the initiatives in this budget would barely increase the tax burden on Pennsylvania families. What is vitally important is that we look at what we get in return from these initiatives. This is what we'll get:
Health care: This budget would make health insurance available to hundreds-of-thousands of uninsured Pennsylvanians and would put measures in place to drive down the cost of health care. Is that worth a 10-cent tax increase on cigarettes and a tax on smokeless tobacco? I believe the answer is yes.
Energy: This budget would enable us to attract more cutting-edge, alternative energy companies, put Pennsylvanians to work in our energy economy, decrease our reliance on foreign oil and drive down energy costs for homes and businesses. Is that worth the $6 that would be assessed on utility bills? Again, I believe the answer is yes.
Health and safety-net services: This budget would maintain our commitment to the disabled, elderly and children by protecting the health care and social services they need in spite of five years of federal cuts totaling more than $2.7 billion for these programs. Are these services worthy of a portion of new sales-tax revenue? There is no question that the answer to this question is, and must be, yes.
I have always worked to paint the full picture and make tough choices so Pennsylvanians come out ahead. This year is no different.
I believe that if you look at the choices we have made, and the reasons why I support these critical investments, that you will better understand that I am doing the job you elected me to do.