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FOR IMMEDIATE RELEASE
October 26, 2005
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Rafferty Votes for State Spending
Control Measures
Creates Taxpayer Fairness Fund for income tax
reductions
Harrisburg – Senator John Rafferty today voted
for legislation that would limit state government
spending and set aside surpluses in a new fund to
reduce the state Personal Income Tax that state
residents pay.
Rafferty said Senate Bill 4, the Taxpayer
Fairness Act, would hold state spending increases to
inflation by statute. A companion measure, Senate
Bill 884, would make the spending limits part of the
state constitution. Both measures now go to the
House for consideration.
"Pennsylvania residents need the Taxpayer
Fairness Act because they deserve to keep more of
the money they earn: to save for college, to buy
groceries, to pay for medical needs," Rafferty
said. "It's a commonsense measure that places
realistic controls on state spending."
In addition to restricting state spending growth,
the bills would set aside half of surplus revenues
in the state's Rainy Day Fund for use in times of
economic necessity, and half in a new Taxpayer
Fairness Fund to reduce the state Personal Income
Tax.
"Thirty states have spending controls, revenue
controls or both. Pennsylvania is in the minority
of states which have no controls," Rafferty said.
"These bill would require state government to live
within its means, just as Pennsylvania families must
do."
The measures approved today would restrict state
spending growth to the lesser of: the average annual
rate of change of personal income in Pennsylvania
for the three preceding years; or the average rate
of inflation plus the average percentage change in
state population for the three preceding years.
Exceeding the spending limit would require the
support of two-thirds of the General Assembly. Both
the Senate Bill 4 and Senate Bill 884 include
exceptions for emergencies or disasters.
Under the legislation:
- 50 percent of surplus revenues will go to the
Rainy Day Fund; 50 percent will go to the new
Taxpayer Fairness Fund.
- When the Rainy Day Fund reaches 10 percent of
General Fund Appropriations, all surplus revenues
will go to the Taxpayer Fairness Fund.
- Money in the Taxpayer Fairness Fund will be
distributed to taxpayers through a temporary
reduction in the Personal Income Tax.
- The lower PIT rate will be in effect Jan. 1 to
Dec. 31 of the following calendar year.
The Taxpayer Fairness Act is part of the
Republican Playbook for Progress, a positive agenda
for Pennsylvania unveiled earlier this year by
Senate and House GOP leaders.
CONTACT: MARK MEYER (717) 787-1398
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