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Editorial - A prize worth the wait

April 21, 1998

Like many states, Pennsylvania has been the beneficiary of America's booming economy, racking up a current-year surplus of $341 million - 48 percent higher than the governor's staff planned for. And while officials are on track to complete consideration of the state's budget in record time, there's a fight brewing over whether to provide more tax relief now, or wait until this summer, when lawmakers will eye a proposal to restructure the state's entire tax code. We suggest that waiting makes more sense.

Why wait? Because Republican Gov. Tom Ridge's budget already contains significant tax cuts for working families and businesses, as well as a 3 percent increase in education spending.

That's not enough for the legislature's Democrats, who'd like to see more education spending, more police on the streets and a 50 percent reduction in the property taxes that support local schools over the next five years.

Who could quarrel with any of those ideas? But the last would cost $2 billion, and would be funded by dipping into the state's surplus every year. That assumes there will be a surplus every year. That's a risky stance to take, given the fact that those who paid a hefty tax bill this year will undoubtedly begin looking for ways to reduce it in the future.

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Instead of an election-year scramble to trim taxes, we'd like to see the legislature go to work in the next session to conservatively project how much surplus revenue the state can expect in future years. Using that figure, lawmakers can then make a more intelligent decision on the proposal to allow local governments to reduce property taxes and make up the difference with a combination of local income and sales taxes.

It would be nice - fantastic, in fact - if the state's surpluses were sufficient to reduce local property taxes without forcing any other tax hikes. If the prize is truly that close, a few more months won't be too long to wait to make sure it's more than an election-year gimmick to get votes.

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