For Immediate Release
January 29, 2007
Contact: Joe Sterns
717-787-5708
(Cell) 717-497-0806
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Citizen Mike Unveils Spending Limits Bill

"Taxpayer Protection Act" Attracts Bipartisan Support of 28 Cosponsors

AUDIO | VIDEO

HARRISBURG (Jan. 29, 2007) – State Sen. Mike "Citizen Mike" Folmer (R-Lebanon) today unveiled legislation that would tighten the reins on state spending so that taxation can be brought under control.

"Pennsylvanians are overtaxed because government can't kick its addiction to spending," said Folmer. "Unlike Pennsylvania families and businesses, which are forced to live within their means, state government routinely spends excessively. Unfortunately, the money government overspends comes from the taxpayers."

Folmer noted the sharp increases in the rates of the following taxes since their respective inceptions:

• Sales and Use Tax – 500 percent
• Personal Income Tax – 35 percent
• Gross Receipts Tax – 500 percent

Folmer noted that over the last several years, state government has spent in excess of inflation and population growth. Research by nonpartisan groups such as the Pennsylvania Commonwealth Foundation indicates that states with a penchant for spending beyond inflation and population growth lag in the creation of new jobs.  

Folmer's proposed Taxpayer Protection Act, which has the bipartisan support of 28 Senators – including all members of Republican leadership, would limit annual expenditures from the Commonwealth’s General Fund to the lesser of: 1) the average rate of personal income growth for the three preceding years; or 2) the average inflation rate for the three preceding years plus the average percentage change in population growth for the three preceding years. If the cap were in effect for the upcoming fiscal year, expenditures from the General Fund would be allowed to increase by 3.15 percent.

Seventy-five percent of surplus tax dollars would be returned to the taxpayers through an offsetting reduction in the rate of the state Personal Income Tax (PIT); twenty-five percent of surplus tax dollars would be deposited into the state’s "Rainy Day Fund."

The proposal allows for the spending cap to be voided during emergencies, provided that two-thirds of both the House and Senate approve suspending the cap.

A companion bill to amend the Pennsylvania Constitution to make taxpayer protection permanent was introduced by Senator Bob Regola (R-Westmoreland).