Defiantly Committed Group of Lawmakers Produced No-Tax-Increase Budget

A budget caucus of sorts has formed in the House and while the new group isn’t necessarily good news for the inner workings of the legislature, it’s great news for the taxpayers.

“They’re calling us ‘Moul’s Marauders’ (after Rep. Dan Moul, R-Adams, the founder of the impromptu group), the ‘Raucous Caucus’ and some other names that aren’t nearly as nice,” said Rep. Kristin Hill (R-York), one of the few stalwart House members who worked with Moul right from the beginning when the new group was formed in late July.

The small team of lawmakers ended up defying all the fiscal experts and big-government enthusiasts, who insisted only new taxes could fill the shortfall in the $32 billion spending part of the budget that was approved in early July -- approved before lawmakers knew how they would pay for all of it. Last week the House passed the group’s work product, ignoring an earlier Senate package that would raise consumer utility bills and natural gas prices; it fills the $2.2 billion revenue gap without a dime in new taxes.

The anti-tax crusaders formed around Moul’s refusal to accept the Senate’s tax increase plan, and his vow to return to the Capitol every day during the legislature’s summer recess to grind out an alternative revenue package.

“I think after the first week there were three of us, and by the second week there were close to 20,” Moul said. “Nothing official. All by word of mouth.”

What Moul and his gang came up with was part grinding hard work and part sheer ingenuity.

“Not bad for a guy from Adams County,” he quipped.

They looked at over 200 accounts in Treasury and settled on forty with surpluses they could tap without compromising the programs they funded. Indeed, Moul said he is offended by accusations that programs or people would suffer because of the transfers. “Any suggestion that someone will lose out on grant money or any other benefit is disgusting,” he said. He added that a lot of people forget that it’s not privately held money they are dealing with but taxpayers’ money.

The other part of the plan, which Moul describes as a reverse mortgage, has the General Fund borrowing against recurring revenues from the state’s share of the 1998 Master Tobacco Settlement. Under it, the state’s public pension funds, SERS and PSERS, would have the right of first refusal to lend the General Fund money against the recurring tobacco revenues. The pension funds would make a healthy return on their investment, and as Moul said, everything would stay in-house.

Hill, who is running for the York County Senate seat that will be left vacant with the gubernatorial aspirations of Republican Scott Wagner, joined Moul immediately upon hearing about his campaign.

“I voted against the spending plan because we should never pass one before we know how to pay for it,” she said. “But at the same time I’m tired of hearing about how Republicans are the party of ‘no.’ I wanted something I could vote ‘yes’ on.”

She added, “when you have five or six years of tax increases in a row and you still need more money you have a spending problem. We have to get to the cost drivers behind state spending.”

Hill supports zero-based budgeting where each agency starts at zero and must justify its entire budget, rather than beginning at the amount they spent the year before and adding on to that. Among other efforts, she has a Medicaid cost reduction bill awaiting action in the Senate.

What Hill, Moul, and the others are up against is a governor who, from the first day he took office, has been straightforward about seeking higher taxes and spending. A recalcitrant legislature has forced him to back off across-the-board increases over the last several years but the governor still hopes to plunder Pennsylvania’s drilling industry with new additional energy taxes. Wolf publicly praised the Senate revenue plan when it was passed just weeks ago.

Then there’s the Senate, which prior to seeing the House plan, had given up hope that the budget could be balanced without raising taxes. The Senate plans to “digest” the House’s revenue package for a few days, according Jenn Kocher, spokesperson for the Senate Republican Caucus. “The House revenue plan has many technical components developed over six weeks,” she said.

It’s unknown whether enough Senators are on board to send the no-tax plan to the governor. But bear in mind that in an unprecedented move, the majority of the majority party voted against the earlier tax increase package the Senate sent to the House.

For her part, Senator Kim Ward (R-Westmoreland) said that she hopes the Caucus agrees to go along with the House; it would be nearly impossible to come up with an alternative. “It’s pretty clear by now that the House will not approve a tax increase,” she said.