The Pennsylvania Senate approved a plan to balance the state budget that features tax increases and $1.3 billion of new borrowing.
The proposal to close a $2.2 billion deficit in the state’s $32 billion budget was approved 26-24 Thursday by the Republican controlled Senate.
The plan includes a severance tax on Marcellus Shale gas drilling and new or higher taxes on consumers’ utility bills. The new plan also includes a proposal to borrow $1.3 billion against Pennsylvania’s annual share of the 1998 multistate settlement with tobacco companies.
The severance tax will generate about $100 million per year according to Senate Majority Leader Jake Corman, R- Centre.
“We came here to make tough choices,” Corman said.
The revenue plan will now go to the republican controlled state House of Representatives for approval before going to democratic governor Tom Wolf.
The House has voiced opposition to these plans due to the increased taxes and borrowing of tobacco money.
"The only winner is the beast that is state government," said State Sen. Scott Wagner, R-York, who is running for the GOP nomination for the 2018 gubernatorial election and was critical of the tax increases on “hard—working Pennsylvanians.”
Consumers may face $405 million in new or higher taxes from a gross receipts tax on natural gas, electric and telecommunications bills. The natural gas tax will be 5.7% while the tax on electric and phone bills will be 6.5% and 6% respectively.
The Senate hopes to raise an additional $43.5 million by enforcing an online retailer tax for marketplaces like Amazon and eBay. Such levies have become more popular throughout the country after being enforced in states like Massachusetts.
The Senate also expects $200 million in tax revenue from an expansion of casino-style gambling that is yet to be approved due to disagreements in the House.