On November 4th, the Pennsylvania electorate turned right and included in the General Assembly’s sweep a more conservative Pennsylvania House of Representatives. A week later those lawmakers in turn elected a House leadership team* that will have a clear set of priorities ready for action when the two-year session begins in January. The agenda will hinge on what incoming Majority Whip Bryan Cutler (R-Lancaster) described as “creating an environment that encourages job creation – private sector job creation”.
Political analysts cite the floundering Obama Presidency for the surge of Republican winners on November 4. The new House leaders can also thank the ongoing benefits of the political fall-out from the 2005 legislative pay raise.
“They (the new leaders) are a direct result of the changes in the complexion of the House since the elections in 2006,” said G. Terry Madonna, Professor of Public Affairs and Director of the Center for Politics and Public Affairs at Franklin and Marshall College. “Half the members of the House are new in the just the past eight years. They are reform-minded, and many are new to politics, not having been in elected or appointed office before.”
The historic eight seat gain for the GOP, now with a 35 seat (119-84) lead over the Democrats, should more than just serve to offset an incoming governor whose one resonant campaign message was a call for higher taxes. With such overwhelming control over the legislative process, the House Republicans also have the firepower to bargain for other needed business reforms they couldn’t achieve the past session.
One long-time House Republican said the next four years will be “a fun ride.” He continued, “We don’t have to go to the floor worrying about a handful of our members taking a walk on us,” the House member said. “If he (Governor-Elect Tom Wolf) wants anything at all he’s going to have to offer something very good on the other end.”
The new power is in good hands. Calling the elections a “very promising turn”, PMA Executive Director David N. Taylor praised the incoming House leadership team as “great friends of Pennsylvania competitiveness” who have proven themselves as pro-growth allies in many policy battles over the years.
The list includes Speaker-designate Mike Turzai (Allegheny) -- who awaits final confirmation by the full House on January 6, Majority Leader Dave Reed (Indiana), Cutler as Whip, Bill Adolph (Delaware) returning as Appropriations Chair, Caucus Chair Sandra Major (Susquehanna), Caucus Secretary Donna Oberlander (Armstrong), Caucus Administrator Brian Ellis (Butler), and Policy Committee Chair Kerry A. Benninghoff (Centre).
The more high profile battles from last session include doing away with state monopoly control of liquor sales and distribution by the Liquor Control Board; an effort to reform the two fiscally out-of-control pensions systems, one for the state workers (SERS) and the other for public school teachers (PSERS), which are piling-on debt at a staggering rate of $10 million a day; eliminating the automatic collection and disbursement of political money by taxpayers to organized labor; and striking an absurd provision from the crimes code that protects stalking, harassment, and deadly threats during labor disputes. Dozens of other needed reforms await action.
Leader Reed said they were already at work in putting together their agenda, but that they are also waiting to hear what Tom Wolf says in his first budget address in March. It’s a near certainty tax increases will be part of the proposal. Governor-elect Wolf campaigned on an inadequately explained change in the structure of the personal income tax (PIT), and for applying a severance tax on Marcellus natural gas drillers.
“No chance he’s going to get us to vote to amend the Constitution to change how the PIT is applied,” Reed said. “And if he’s going to have to make a very good argument indeed why a severance tax makes more sense than the impact fee we now have.”
It’s difficult to imagine a sufficiently compelling argument. Pennsylvania is the only state that imposes an impact fee on the industry. The fee has generated more than $630 million over the past three years, money that goes directly to local government for infrastructure improvement projects. Additionally, more than $2.1 billion in other shale-related taxes have been generated across the commonwealth. A call for new energy taxes is even less persuasive in light of plunging gasoline prices from America’s fracking-driven oil boom.
“A severance tax will hurt everyone’s bottom line, everyone in the supply chain, from the mom and pop stores, to the middle-size business,” said Stephanie Catarino Wissman, executive director of the Associated Petroleum Industries of Pennsylvania. “We will absolutely fight against any increase.
Mike Turzai recently told a meeting of Pittsburgh business people that the first place to look for revenues is through auctioning the state liquor stores. His office estimates the sale would generate between $1 billion and $1.5 billion.
At the same time, all three top leaders say they are determined not to descend into gridlock as Congress and the president have. House GOP spokesman Steve Miskin said Turzai has a track record of consensus building, including many pieces of legislation that passed with bipartisan majorities. And Cutler, with no cracks in his conservative mantle, has a history in his short time in office of reaching over to the other side. “One of the first thing I’m going to do as Whip is find where the compromise points are in the Caucus early in the negotiation process.”
*We will be reviewing the new Senate team in next Bulletin