gillespie spring 2010 newsletter

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Spring 2010

STATE REPRESENTATIVE

Keith GillespieYour Representative to the State House

RepGillespie.com

PRSRT STD

U.S. POSTAGE

PAID

HARRISBURG, PA

PERMIT NO. 529

Dear Friends:This certainly has been an interesting winter with

the amount of snow weve had to endure. Fortunately,spring.

At the state Capitol, it is budget season. Membersof the General Assembly are just beginning toundertake the task of putting together a spending planeconomic conditions we are experiencing as a stateand a country.

This will be a challenging task, just as you and

your household face tough spending decisions. Asmembers of the Legislature, we must lead by exampleand continue to be good stewards of your hard-earnedtaxpayer dollars.

Governor Ed Rendell has laid out his thoughtssome of the highlights of his proposal and offer youan opportunity to provide feedback on these ideas.

As a state representative, I am charged with servingmy constituents and being your voice in Harrisburg. Itis a responsibility I do not take lightly. Because of that,we need to have a conversation about the budget. Thisnewsletter is designed to initiate that discussion.

Sincerely,

Keith Gillespie

House Committee Approves

Gillespie Bill Mandating Payment

of Court Costs by Defendants in

Criminal Cases HARRISBURG The House Judiciary Committee hasunanimously approved my legislation requiring defendants in criminal

cases to be responsible for payment of all court costs associated withtheir prosecution. Conversations with York County Clerk of CourtsDon OShell inspired me to author House Bill 2119. lawsuit against the Commonwealth on the basis of it deducting moneyfrom his inmate account to pay the costs of his 1996 trials, all becauseof a lack of a court order. Spotz won that suit, thus setting a precedentfor a number of other prison inmates to inquire about having theirsituations re-evaluated. The result has been costly to York County.

OShell says requests to date for reimbursement made by inmatesas a result of the Spotz decision have cost York County approximately$100,000. fees, subpoenas and transportation. Court costs in the Spotz case varywith the different trials in different counties, ranging from $10,000 to$12,000.

The bill, which is being considered by the House AppropriationsCommittee, mandates the payment of court costs by defendants,whether judges address that during sentencing or not.

Budget Breakdown

Last month, Governor Rendell issued his budget address and

Spending

The good news is the governors budget proposal relies on nobroad-based tax increases. The 2010-11 total General Fund budget

is $29 billion an increase of $1.15 billion or 4.1 percent afteraccounting for the use of nearly $2.7 billion in Federal stimulusfunds in 2009-10 and nearly $2.8 billion in 2010-11. The majorspending increases in this budget come in basic education, publicwelfare, corrections and debt service.

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RepGillespie.com

Rendell Proposes New Taxes

While there are no broad-based tax increases in this budget proposal, the plan does call for more than $1 billion in taxincreases.

Pennsylvania remains the only state in the nation that does not tax smokeless tobacco and is one of only two states that doesnot tax cigars. The governors plan includes a tax on both smokeless tobacco and cigars at 30 percent of their wholesale value.Some estimates have these taxes generating $41.6 million in Fiscal Year 2010-11.

You may have heard of the Marcellus shale natural gas reserve, the geologic formation believed to contain as much as 500trillion cubic feet of natural gas. In a recent Marcellus shale land lease sale, the Commonwealth received more than twice therevenue it expected. The governor feels the industry can bear a modest tax 5 percent of value, plus 4.7 cents per 1,000 cubicfeet of gas produced without hurting industry growth.

As an avid outdoorsman and member of the House Game and Fisheries Committee, I am concerned with the effectexcessive drilling will have on the environment. On the other hand, I have never been a proponent of tax increases, and amhesitant to go that route in penalizing an industry that could address our energy needs in a time of rising electric rates that willalready be costly to consumers.

This newsletter contains survey questions dealing with both the Marcellus shale and proposed tobacco tax issues. I am

particularly interested in your comments and answers to these questions as I gauge the opinion of the residents of the 47thDistrict.

The proposal is dependent on two major sources of revenue. It assumes approximately $800 million in Federal welfaregure falls short of expectation, the budget would be outof balance. billion in new spending at a time when projections have us facing a $525 million shortfall this year.

scal restraint in negotiating our current budget, which is why I voted against the plan. Were the governorsproposal placed on the table right now, I would vote in a similar fashion.

Members of the General Assembly are sent to Harrisburg to be effective stewards of hard-earned taxpayer dollars. We

need to rein in spending and not depend further on the people of Pennsylvania.

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Sales Tax Reduction and Expansion

Governor Rendell has proposed reducing the state sales tax to 4 percent and eliminating 74 tax exemptions. He says theconcept would result in $531.5 million in revenue raised during the 2010-1Stimulus Transition Reserve Fund to help balance Pennsylvanias 2011-12 budget when federal stimulus funding ends and thestates pension obligations begin to increase.

In 2010-11, the federal government is projected to provide Pennsylvania with $2.8 billion in stimulus funding, but only$500 million of these funds will be available in 2011-12. Unless steps are taken today, the commonwealth will be faced withthe choice of drastic spending cuts or massive tax increases.

The list of 74 items to be taxed does not include food, clothing, prescription medications, health care services andeducational tuition; however, it is the governors wish to attach a sales tax to the purchase of items such as accounting andbookkeeping services, basic television, coal, legal fees, magazines, newspapers, residential electric, residential fuel oil and gasand residential telephone service.

The entire list of proposed repealed exemptions is available on my Web site,RepGillespie.com, under Budget News.While I take issue with many of the items on this list, I stand particularly opposed to those dealing with fuel and utilitycosts. Most York countians are preparing to bear the impact of the lifting of electric rate caps at the end of this year. A tax onresidential electric use would place a further burden on hard-working taxpayers and is something I cannot support.

What Property Tax Relief?

The overwhelming topic brought up by the people I meet continues to be property tax relief. The governor addressed thisin his budget proposal by saying Pennsylvania homeowners, on average, will continue to receive nearly $200 in state-fundedproperty tax relief with even more savings for older adults who have the most urgent need. This is not enough. nothing to keep that promise. During the debate about expanded gaming last year, we attempted to have table games revenuediverted to the Property Tax Relief Fund. The legislation was defeated on a party line vote.

We will make strides toward relieving the burden of property tax relief when we learn to effectively fund our schools. TheYork County delegation was instrumental in bringing about the costing-out study, which dealt with the funding formula. We

Right now, we are simply blanketing the state with education dollars and not taking into consideration areas such as YorkCounty where substantial growth has taken place. We need to account for the growing areas of the Commonwealth and notspend haphazardly. The wise use of your hard-earned taxpayer dollars will move closer to more equitable funding of educationand less dependency on property taxes.

I recently welcomed to the state Capitol students from

Wrightsville Elementary School in the Eastern York School

District. If you would like to schedule a tour for your school

(717) 705-7167.

Pending Pension CrisisPennsylvania is one of many states facing a shortfall in public

touched on pension reform, the governor has taken no action to addressthe upcoming rate spike.

Causes of the spike include diminished return on investment inFiscal Year 2007-08. A series of decisions by the our Legislature andgovernor have delayed the full impact for the last few years, but costs ofless than $1 billion a year now are projected to climb to about $6 billionannually in the coming three years.

The House Republican Caucus has assigned its GovernmentReform Task Force the duty of providing a workable solution to thepending pension crisis. As this issue continues to progress, additionalroundtable discussions and hearings will be held.

Options to address this issue include increasing the funding of thesystem, decrease liabilities of the system or defer the liabilities.

Some pension reform alternatives include:

based on a formula using factors such as salary history andduration of employment.

program where members each have an individual

account (or accounts) that accumulate employee contributionsand/or employer contributions and investment return.

Hybrid Plan- incorporating valuable features of each of the above.

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gillespie spring 2010 newsletter

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