HARRISBURG, Pa. (AP) — Republican lawmakers on Tuesday advanced legislation for a $3 billion tax cut, their just-unveiled counterproposal to Democratic Gov. Josh Shapiro‘s budget plan as each side offers a competing vision for how to use a massive cash surplus sitting in the state treasury.
The tax legislation cutting taxes on income and electric service passed the Republican-controlled Senate, 36-14, as Republicans positioned their top budget priority with less than two months until the new fiscal year starts on July 1.
Republicans said it would be the largest tax cut in the state’s history.
In the coming weeks, budget negotiations could revolve around Shapiro’s bid to boost spending by $3 billion, versus the Republican counterproposal to cut taxes by $3 billion. Top Democrats opposed the bill, even though it drew support from eight of 22 Democrats, and said that it won’t pass in the Democratic-controlled House.
Republicans said the bill was intended as a marker for their priorities after listening to weeks and months of Democrats floating plans to spend the state’s considerable surplus.
“What we’re saying … is if you think there’s too much money in the savings account, then let’s bring it back to the taxpayer who put it there in the first place,” Senate Majority Leader Joe Pittman told reporters in a news conference.
Republicans contended that such tax cuts would improve household budgets and stoke the economy in a state that desperately needs to step up its growth and appeal to keep pace with faster-growing states.
Shapiro’s administration expects to have $14 billion in reserve by the end of June, and what to do with it has been the subject of debate in Harrisburg.
In a statement, Shapiro didn’t say whether he supports it, but did welcome a conversation about what to with the state’s surplus.
“With this proposal, Senate Republican Leaders are coming to the table and acknowledging that we must invest in Pennsylvania’s future,” his office said.
Democrats sought to attach tax breaks for the lowest earners — rejected by Republicans — and criticized the bill as lacking transparency, having emerged barely 24 hours before the vote.
They also said it lacks any help for public schools, considering last year’s court decision that found Pennsylvania’s system of funding public schools violates the constitutional rights of students in poorer districts.
Sen. Sharif Street, a Democrat from Philadelphia, said that attracting companies and new residents is about more than tax rates. People want a good quality of life, like good public schools and safe communities, and cutting taxes doesn’t help Pennsylvania improve its poor track record on funding schools and public safety, Street said.