– Republican Appropriations Chairman Seth Grove (R-York) held a briefing
for members of the press on May 11th, to cover a variety of issues heading into June, the most active month in terms of the state budget.
“First and foremost, this is not the time to spend beyond our means,” said Grove. “Since the initial spike in revenue starting in 2021 – stemming from the first round of federal stimulus checks which reached most Americans by January 2021 – General Fund incoming dollars have slowed. From the Personal Income Tax withholding to Sales and Use Taxes, and the Realty Transfer Tax, Pennsylvania state government needs to focus on saving, and not increasing our spending.”
In addition to declining revenues, the population continues its trend downward as well. According to IRS data as reported by the Independent Fiscal Office, Pennsylvania lost over 14,000 residents from 2021 to 2021. “It’s no secret where former Pennsylvanians are moving to – tax friendly states like North Carolina and Florida,” Grove said. “When Gov. Shapiro said he is tired of losing to other states, I agree. This is a major reason why I joined with my colleagues in launching the Keystone Commitment.”
The Keystone Commitment was officially announced on May 3rd, which laid out Republican priorities of growing the economy, making communities more affordable, keeping communities safe, and focusing our education on the students first. This is what is driving a budget reform package offered by House Republicans.
“In order to grow our economy, government needs to get out of the way and spend money on things that matter,” Grove added. “It’s past time to bring some sunshine and accountability to the budget process.”
Grove also renewed his desire for zero-based budgeting. “Before he was attorney general, Josh Shapiro was a Montgomery County commissioner. In this role, he championed zero-based budgeting along with current Budget Secretary Uri Monson,” Grove said. “Using the zero-based budgeting approach, Shapiro took Montgomery County from a significant structural deficit to a budget surplus.”
In 2016 Shapiro said
, “I believe zero-based budgeting is the most important thing governments can do. From Harrisburg to D.C., the debate is always about taxes and spending, when what we should be doing is starting our budgets at zero, defining our core mission, and then funding it.” Grove said at the briefing, he could not agree more with this statement and is eager to get to work on this concept.
Grove also took the opportunity to point out several important facts from the budget hearings. First is related to the popular Property Tax and Rent Rebate Program. “House Republicans are willing to have a conversation about expanding this program, but the governor’s promises to expand this program, according to his own budget proposal, won’t take place until June 2024,” Grove explained. Even more puzzling is the budget secretary only certified $864.4 million for relief this year, House Republicans believe this number could have been over $1 billion. “We are owed an answer on why the governor is certifying the Property Tax Relief Fund so low,” Grove added.
During the Department of Revenue’s budget hearing, the new 911 funding proposal of raising and indexing the 911 fee while ending the Sales and Gross Receipts Tax on mobile phones, was reviewed by Acting Secretary Pat Browne. The department confirmed Gov. Shapiro’s claim of $124 million a year in savings was incorrect. At best by Fiscal Year 2024-25 the removal of these taxes will result in $89.6 million in lost revenues. However, due to the increase in the 911 fee and subsequent indexing, by fiscal year 2025-26 the tax burden on consumers will have increased.
“911 services are a crucial function of county government,” Grove said. “However, by creating an ‘infinity tax’ we are limiting our ability to respond to the needs of our first responders and ensuring cell phone bills will continue to rise year after year. This isn’t a responsible way to tax or budget.”
Grove again renewed his call for program integrity measures in state government. “Of the 20,000 cases the Office of the State Inspector General reviewed last year, 40% of them showed fraud,” Grove shared. “This is an astounding number, and only speaks to the need for more inspectors and important safeguards in law. Attorney General Josh Shapiro estimated in 2020 that Pennsylvania is losing $3 billion a year to fraud.”
Additionally, a new report from the Office of the State Inspector General (OSIG) highlighted the need to have more reviews of Unemployment Compensation fraud. According to the OSIG report mandated by Act 141 of 2022
“…based on the various other reports produced for and by L&I during the pandemic, it appears that most fraud-rate multiplier-based estimates place the amount of fraudulent payments made in UC programs in Pennsylvania from March 1, 2020 through September 30, 2022 to be approximately $6 billion.”
“The 2023-24 budget must address these issues,” Grove said.
Moving forward, Grove shared optimism on the leadership of Democrat Chairman Jordan Harris. “Chairman Harris ran excellent budget hearings, allowing members of both sides to ask pointed questions of agency heads. I sincerely believe we can work together to craft a responsible budget.”
Watch a video of the meeting below.
Representative Seth Grove
Pennsylvania House of Representatives
Media Contact: Charlie O’Neill