According to local news media, Democratic state senator Jay Costa of Pennsylvania is reportedly proposing a “one-time lump sum payment” to distribute a portion of the state’s surplus to the general public.
Costa stated on Friday during an interview with WHTM’s This Week in Pennsylvania that Pennsylvania is “well-positioned resource-wise” and is expected to have a surplus of over $800 million for the current fiscal year. The deadline for officials to adopt the final budget for the fiscal year 2024/25 is less than a month away, on June 30.
“We have a month before the June 30 deadline arrives,” he informed the television channel. “I think resource-wise we’re well positioned in Pennsylvania with better than a $14 billion budget surplus, but also this year we’re seeing that, now that we’re moving into June, we’re probably going to have $800 million excess surplus just for this fiscal year.”
According to him: “We’re well-positioned to make investment, we’ll be thoughtful and figuring out ways in which we can return some of that money to Pennsylvania taxpayers.”
Costa acknowledged that his Republican colleagues’ proposal to lower the state’s personal income tax from 3.07 percent to 2.8 percent using the $14 billion surplus was an option to consider, but he suggested that returning the money to residents as a “one-time lump sum payment” would be a far better choice.
“If we provide maybe a one-time lump sum payment back to folks they can immediately put it back into the economy,” according to him. “Or we can look at something similar to what we did before with the child and dependent care tax credit program,” according to him.
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As a whole, these choices may be “more appropriate” and “more impactful,” according to Costa, but they need to be “coupled with investments” in jobs and schools.
These financial commitments “generate tax resources” together with “will allow the program to move forward and be able to generate revenues to pay for itself.” Costa acknowledged that Pennsylvania could be more business-friendly, but he argued that the state’s cap on corporate taxes should take center stage.
In 2024, following the signing of Act 7 of 2023, Governor Josh Shapiro had pledged to provide senior people with increased financial assistance. Pennsylvania seniors will get a bigger reduction in their tax bills thanks to a new law that expands the Property Tax/Rent Rebate (PTRR). In contrast to $650 in 2023, the maximum rebate this year was $1,000.
State Republicans are against additional expenditure. According to an opinion post published on Sunday by State Representative Tim O’Neal, the Democrat Shapiro is proposing a budget that “calls for outrageous spending increases that would set Pennsylvania on a path towards massive tax hikes in just a few years.”
Reference: Newsweek