Fall 2009

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STATE REPRESENTATIVE SAM ROHRER

Rohrer Opposes Tax-Hiking,Over-Spending State Budget

While Rep. Sam Rohrer and most Pennsylvanians wererelieved when Gov. Ed Rendell ended a 101-day-long stale-mate by signing a state budget into law, the Berks Countylegislator opposed the tax hikes and excessive spendingin the ﬁnal budget agreement.“The good news is that the budget standoff has cometo an end,” Rohrer said. “The bad news is that the standoff was ended through the enactment of a state budget thatraises taxes and spends too much. After waiting morethan 100 days past the deadline for a budget, a majority of Pennsylvanians were rightfully disappointed with the ﬁnalproduct.”

Tax Hikes

The budget includes a 25-cent-per-pack increase in the state tax oncigarettes, creates a new tax on “littlecigars,” calls for a $374 million tax onPennsylvania employers, and includesa tax on Medicaid Managed Care Or-ganizations.

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Republican Finance CommitteeChairman Keeps Eyes on Revenues

In June, Rep. Sam Rohrer, Republican chairmanof the House Finance Committee, released a back-grounder prepared by his staff showing the state’s ver-sion of a checking account was running low on cash,could succumb to deficits in as little as three monthsand could require lawmakers to waste resources fi-nancing short-term debt instead of providing valuableprograms and services for constituents.The issue revolved around the state’s cash onhand, which can be thought of in the context of afamily’s checking account. Cash on hand is the moneythat is available to pay the Commonwealth’s bills.The House Finance Committee backgrounder showed the state’s “checking account” was in aweakened condition. During the previous two years,the state ended the fiscal year with more than $4 bil-lion in its checking account. This year, the state wasprojected to end the year with half that – or less than$2 billion – in this important account.To read more about this issue and view the HouseFinance Committee backgrounder, visit Rohrer’s Website at

SamRohrer.com

Rohrer Proposed ‘Pact with PA’ to Guide Budget Development

In June, Rep. Sam Rohrer led a bicameral group of lawmakers in unveiling the “Pact with Pennsylvania,” a proposedagreement between state legislators and the constituents and taxpayers they are elected to represent.The proposal was based on the underlying premise that – instead of focusing on how much money special interestgroups and politicians

want to spend

– a state budget should represent how much taxpayers

can afford to pay

.The pact was not a budget proposal. Rather, it was an agreement detailing the ﬁve principles that should guide mem-bers’ actions during budget negotiations and the eventual budget vote. Those principles included:1. No tax increases.2. No additional state debt.3. Rainy Day Fund: preserved for original intent.4. Stabilize existing ﬁnancial obligations.5. Proactive tax reform to improve Pennsylvania’s job climate.Copies of the “Pact with Pennsylvania” are available at Rohrer’s Web site at SamRohrer.com.

PRSRT STDU.S. POSTAGEPAIDHARRISBURG, PAPERMIT NO. 529

FOR MORE INFORMATIO

Local Students WinStatewide Academic Competition

A team of students from Wilson High School in Berks County wonthe statewide Pennsylvania Academic Competition hosted by Rep. SamRohrer on behalf of the Pennsylvania House of Representatives, earningthe team an opportunity to compete at this year’s National Tournamentof Academic Excellence (NTAE) held at Disney World in Florida.The Wilson HighSchool team wascoached by JohnMagala and includedstudents Dustin Hill,Collin Hull, Mike Ma-hon, Purau Patel andJen Uspal. As thestatewide champions,the students earned a$2,000 scholarship for their high school.Students fromacross Pennsylvaniatraveled to the stateCapitol to participatein the 18th annual Pennsylvania Academic Competition. Prior to thecompetition, the House unanimously approved a resolution introducedby Rohrer marking the week of April 20 through April 24 as “Pennsyl-vania Academic Competition Week.” Chester County Intermediate Unitorganized the event, which Rohrer has hosted for the last 11 years.The students competed based on their knowledge of the followingcategories: literature, ﬁne arts and grammar; world history and geog-raphy; American history, geography and economics; science; contem-porary events; and, potpourri (any subject).

Rep. Sam Rohrer (left), Coach John Magala (right) and the stu-dents from Wilson High School had their picture taken on the House ﬂoor following the team’s victory in the statewide Penn- sylvania Academic Competition.

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State Budget

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“This budget suggests that the law-makers who crafted it believe some Penn-sylvanians can afford to pay higher taxesin the middle of a recession,” Rohrer said.“This budget targets smokers and smallbusiness owners to carry an extra burdenduring tough economic times. Singling outspeciﬁc groups used to be called discrimi-nation. I guess now this is what passesas budget policy in the Commonwealth of Pennsylvania.”While the state spending plan in-cludes the targeted tax increases above,Rohrer and his ﬁscally conservative col-leagues were able to block several newor increased taxes proposed by Governor Rendell, including the governor’s call for aPersonal Income Tax (PIT) increase.

Draining the Reserve Accounts

Budget negotiators balanced the statespending plan, in part, by draining severalreserve accounts. The Commonwealthhad built up a $755 million Rainy Day Fundthat is intended to help lawmakers pay for unanticipated expenses. That fund willbe completely depleted during the currentbudget year.“Instead of making the decisions nec-essary to balance revenues and costs,this budget relies on reserve accounts topay for excessive spending,” Rohrer said.“By raiding the Rainy Day Fund, budgetnegotiators have left us with little protec-tion against unforeseen events. If weexperience a natural disaster, no moneywill be left in the reserve accounts to helpus respond to it.”

Federal Bailout Dollars

The federal government also assistedPennsylvania in overspending. “Instead of encouraging states to bring expenses inline with revenues, Uncle Sam – throughfederal stimulus dollars – essentiallyprinted more money and handed it outto the states to fill their budget deficits,”Rohrer said. “This amounted to a bailoutfor state governments, effectively freeingthem from the responsibility of taking thenecessary steps to enact realistic spend-ing plans.“Politicians in our nation’s Capitol arehoping that most people won’t realize thatfederal taxpayers and state taxpayers arequite often the very same people. This isequivalent to trying to pay off one creditcard using another. While the place yousend the check has changed, you are stillon the hook for the payment.”The state budget includes more than$2.6 billion in federal bailout dollars. Addedto the nearly $25.2 billion in state dollarsin the final budget, this means the Com-monwealth will spend approximately $27.8billion in the 2009–2010 fiscal year.

Health Care Reform: A State Issue

As the lawmaker who has led Pennsylvania’s efforts to reaffirm itssovereignty under the 10th Amendment of the U.S. Constitution, Rep.Sam Rohrer firmly believes that health care reform is a state – not afederal – issue.“Health care is an issue that should be discussed and debated onthe state level,” Rohrer said. “The federal government should keep itsnose out of areas where it has no right to infringe. There is certainly noconstitutional basis for a federal takeover of the health care system.”Rohrer noted that the House Republican Caucus established aHealth Care Task Force to determine how to best meet the ever-changingneeds of residents and the Commonwealth’s health care system. ThisTask Force has been examining the cost of health care and insuranceand is focusing on increasing consumer choice, reducing governmentbureaucracy, providing tax credits, reform-ing medical liability laws, and enhancingmarketplace competition.Earlier this year, Rohrer introduced aresolution to reaffirm Pennsylvania’s sov-ereignty and its right to deal with this andother state issues under the 10th Amend-ment, which reads:

The powers not delegated to theUnited States by the Constitution, nor prohibited by it to the states, are re- served to the states respectively, or tothe people.

N, VISIT WWW.SAMROHRER.COM TODAY!

Rohrer Reintroduces School Property Tax Elimination Act

Hailing it as thesingle most importantstep Pennsylvania law-makers could take to jumpstart the state’seconomy, Rep. SamRohrer recently unveiledthe School Property TaxElimination Act (SP-TEA).“No tax should havethe power to leave youhomeless,” Rohrer said.“Seniors citizens, retiredcouples, young families,recently laid-off work-ers—through no fault of their own, all these people arestanding on the precipice of losing their homes, as their pensions have plummeted and incomes have beenreduced or even eliminated. For families struggling tomake mortgage payments, this plan offers the only truehope of remaining in their homes and securing their home ownership.”The bill is distinctive in that it remains the only planthat has the capacity and the simplicity to present a com-prehensive restructuring of the way Pennsylvania fundsits schools and addresses issues of spending controls,predictability, debt, and distribution. Instead of relying onlocal school property taxes, school districts would receivetheir primary source of funding from an expanded statesales tax. The sales tax rate would remain at 6 percent,but would be expanded to include some currently tax-exempt items. Food, clothing, prescription medicationsand other essential items and services would not betaxed under Rohrer’s plan. The SPTEA also would usea percentage of royalty payments generated throughexpanded natural gas harvesting activities on state forestlands to fund Pennsylvania schools.“Partial reduction is not the answer,” Rohrer stated.“Taxes continue to rise unabated, and the governor’s so-called ‘Property Tax Relief Fund’ barely makes a dent inwhat most taxpayers have to pay. It’s a political response,designed to alleviate the problem and never solve it, andit has distracted from the real issue. The only solution iscomplete and total elimination.”Funds from the expanded state sales tax and therevenues from Marcellus Shale natural gas developmentwould be deposited into a newly created Education Op-erating Fund (EOF). The money in the EOF would beused to implement a four-year phase out of school districtproperty taxes. The phase-out would ensure a smoothtransition into the new system without disrupting normaloperations of either schools or businesses.“When we first introduced the idea of school propertytax elimination, our proposal ran parallel to the governor’sproposal to use gambling proceeds to relieve—never solve—the property tax burden,” Rohrer said. “Here weare, seven years later, and homeowners have received just one payment, and a pittance at that, to help with their taxes. Had we enacted the SPTEA back then, we wouldhave already passed through the four-year phase out.Homeowners would not only be free from paying anyschool property taxes, but the state would have had thetime to build up the excess revenue in order to weather this current economic storm.”The SPTEA addresses the spending side of theequation, tying the school districts’ revenue to the salestax. Under the current system, as overall property taxrevenue decreases because of increasing foreclosuresand delinquencies, schools are forced to consider rais-ing their property tax rates, further burdening those whocan pay and creating a vicious cycle of foreclosures anddelinquencies. Under Rohrer’s plan, the sales tax wouldcontinue to create a stable form of revenue. Even indifficult economic climates when the sales tax revenuedeclines, schools would be forced, along with all Penn-sylvanians, to reduce their spending.Rohrer argued that using the state sales tax to fundeducation poses significant benefits over the existingproperty tax system. Specifically, he noted that the salestax was instituted in 1953 expressly for the purpose of ed-ucational funding, and, as such, remains the best-suitedsource for schools, because sales tax revenue—and thusschool revenue—will grow as the economy improves.In addition, Pennsylvanians will have more control over the amount of taxes they pay, as they can increase or reduce their tax burden based on the purchases theymake. Finally, sales tax revenue is sensitive to economicrealities, ensuring that when Pennsylvania families areforced to reduce their consumption, schools also will beforced to rein in their spending.Rohrer’s plan also offers the first real opportunityfor voters to have direct control over any future tax in-creases. Under the SPTEA, any future tax increaseswould have to be approved by voters through a ballotreferendum.“Under the provisions of Act 1, the voter referendumswe have are what I like to call ‘taxpayer protection inname only,’” Rohrer said. “Sure, we have a law thatsays voters are supposed to have the right to approveor deny any school tax increases. But the Departmentof Education usually grants the district an exemptionand the voters never have a chance to vote on the taxincrease. My plan offers real voter empowerment whereprevious plans offered only false hope.”“For years, school property tax elimination seemedlike a pie-in-the-sky idea to lawmakers in Harrisburg—anoble but impractical goal,” Rohrer said. “But we havea plan to make that dream a reality. Now, it is only amatter of whether state lawmakers choose to listen totheir constituents and then act upon their cries in order to make that dream come true for Pennsylvania propertytaxpayers.”The SPTEA has been introduced as House Bill 1275.For more information about the proposal, visit Rohrer’sWeb site at SamRohrer.com.