MEMO: Taxpayer Caucus report error-filled

May 24, 2016

To: Interested Parties
From: Jeff Sheridan, Press Secretary
Subject: Taxpayer Caucus report error-filled
Date: May 24, 2016

Governor Wolf looks forward to continuing his discussions with the legislature in an effort to reach agreement on a 2016-17 budget that is truly balanced, fixes the deficit and makes targeted investments in areas like education and combating Pennsylvania’s heroin crisis.

But what we cannot do is continue to rely on gimmicks and smoke and mirrors, which is what the Taxpayers’ Caucus report calls for.

We encourage Senator Wagner and Representative Grove to work with us to come up with real solutions to our budget problems, just like many of their colleagues are doing, but today’s report is error-filled and presents savings that are either accounted for in the governor’s budget, have been proposed in the past, but have never received support, or are impossible to achieve:

• Savings totaling $500 million from Governor Wolf’s Medicaid expansion is included in the governor’s 2016-17 budget proposal.
• Savings from the governor’s GO-TIME initiative totaling $158 million is included in the governor’s 2016-17 budget proposal.
• There are not $400 million in prior-year lapses available. We continue to work with the legislature to identify $200 million in lapses assumed to balance the 2015-16 budget.
• There is no current or past pension reform proposal that provides immediate savings in 2016-17. We remain committed to working with the legislature to pass real, meaningful pension reform.
• Tax amnesty could cost the commonwealth money by rewarding delinquent taxpayers that will otherwise pay the full amount owed due to the Department of Revenue’s collection efforts.
• They claim there are $100 million in IT savings through CHIP, but that is incorrect.
o The governor’s budget includes nearly $8 million in savings through CHIP, a program that provides health coverage for children.

This proposal amounts to a nearly $1 billion cut in DHS that will result in reduced or eliminated services for seniors, children, and the disabled.

Governor Wolf has also proposed several other measures that need legislative authorization designed to save money that he hopes Senator Wagner and Representative Grove will work with him to accomplish, including:

• The merger of the Board of Probation and Parole with the Department of Corrections, which will generate an immediate $10 million in savings.
• Moving the eHealth Partnership Authority to the Department of Human Services, which will generate an immediate $1 million in savings.
• The reduction of management fees our pension systems pay to Wall Street firms, which will result in hundreds of millions in savings; however, not the $600 million that the report claims.

Additionally, the governor proposed cutting the corporate net income tax in half, but Senator Wagner and Representative Grove were silent.

As negotiations continue, the governor is committed to finding cost-savings, and he hopes to continue working with the legislature to reach final agreement on the 2016-17 budget, but these savings have to be real and achievable.

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