PRIOR PASSAGE - NONE
PRINTER'S NO. 269
No. 242 Session of 1993
INTRODUCED BY PITTS, FAIRCHILD, TRELLO, BIRMELIN, PETRONE, LEH,
FLICK, MERRY, FARMER, FARGO, GEIST, GERLACH, BARLEY, HESS,
ARMSTRONG, E. Z. TAYLOR, CLYMER, HERSHEY, CLARK, ALLEN,
CIVERA, ADOLPH, DURHAM, RAYMOND, DEMPSEY, TULLI, SAURMAN,
CESSAR, PERZEL, SEMMEL, S. H. SMITH, LAWLESS, SERAFINI, BUNT,
HASAY, GODSHALL, GLADECK, KING, BAKER, JADLOWIEC, KENNEY,
FICHTER, MARSICO, BUSH, NAILOR, M. N. WRIGHT, STERN,
MICOZZIE, MASLAND, MAYERNIK, GANNON, CORNELL, STEIL,
HUTCHINSON, MILLER, NYCE, ROHRER, DeLUCA, LAUB, TOMLINSON,
REINARD, MELIO, PETTIT, CHADWICK, SCHEETZ, BROWN, PLATTS AND
LYNCH, FEBRUARY 8, 1993
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 8, 1993
A JOINT RESOLUTION
1 Proposing an amendment to the Constitution of the Commonwealth
2 of Pennsylvania, providing for tax increase limitations and
3 spending limitations on the State and its political
4 subdivisions.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby resolves as follows:
7 Section 1. The following amendment to the Constitution of
8 Pennsylvania is proposed in accordance with Article XI:
9 That Article VIII be amended by adding sections to read:
10 § 18. Tax increase limitations.
11 (a) Taxes instituted by the Commonwealth after January 1,
12 1994, require the affirmative vote of two-thirds of the members
13 elected to each House of the General Assembly.
14 (b) Tax rate increases imposed by the Commonwealth require
1 the affirmative vote of two-thirds of the members elected to
2 each House of the General Assembly.
3 (c) Tax base expansions imposed by the Commonwealth require
4 the affirmative vote of two-thirds of the members elected to
5 each House of the General Assembly.
6 (d) For all political subdivisions in the Commonwealth:
7 (1) Voter approval by a majority vote through referendum
8 shall be obtained for any tax rate increases, for any tax base
9 expansions or for any new taxes instituted after January 1,
10 1994, to be imposed when the percentage change in total
11 estimated tax revenues in the new fiscal year exceed total tax
12 revenues in the current fiscal year by more than the rate of
13 inflation as determined from the most recent Consumer Price
14 Index for the immediately preceding 12-month period.
15 (2) The requirements of this subsection shall not apply to
16 increased revenue necessary to meet the increased costs of any
17 of the following:
18 (i) Costs arising from increased school enrollment, but only
19 to the extent of the additional enrollment.
20 (ii) Costs which arise from mandated increases in pension or
21 retirement costs, but only to the extent of these additional
22 costs.
23 (iii) Costs which arise from servicing of bonded
24 indebtedness incurred prior to the effective date of this
25 amendment, but only to the extent of these additional costs.
26 (iv) Costs which arise from increased numbers of residents
27 within the political subdivision, but only to the extent of
28 these additional costs.
29 § 19. Spending limitations for the Commonwealth.
30 (a) Except as provided in subsection (b), total spending by
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1 the Commonwealth shall not exceed the spending limit in any
2 fiscal year. The spending limit for any fiscal year shall be
3 equal to the spending during the immediately prior fiscal year,
4 adjusted by 80% of the compound annual rate of change for the
5 two preceding years of the Personal Income by Place of Residence
6 for Pennsylvania as defined and officially reported by the
7 United States Department of Commerce. The percentage of the rate
8 of change used in any fiscal year to adjust the limit may be
9 increased for that year, but not to a percentage in excess of
10 100%, by the affirmative vote of two-thirds of the members
11 elected to each House of the General Assembly.
12 (b) The spending limit of the Commonwealth may be exceeded
13 in any fiscal year for presidentially declared emergency or
14 major disaster. The spending limit may also be exceeded for
15 other declared emergencies if the Governor so requests and the
16 General Assembly approves by the affirmative vote of two-thirds
17 of the members elected to each House of the General Assembly.
18 The excess spending authorized by exceeding the limit in this
19 manner shall not be included in the computation base of the
20 spending limit for any subsequent fiscal year.
21 (c) If the duty of paying any cost or any portion thereof is
22 transferred from one level or unit of government to another, the
23 cost so transferred shall be deducted from the spending limit of
24 the transferor and shall be added to the spending limit of the
25 transferee.
26 (d) The Commonwealth shall not impose upon any unit of local
27 government new programs or increase levels of service under
28 existing programs unless the necessary cost thereof shall be
29 fully funded by the Commonwealth.
30 (e) Future liabilities resulting from the adoption of or
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1 contracting for new or improved deferred compensation or
2 benefits or pensions on or after the effective date of this
3 amendment shall be fully funded each in accordance with an
4 accepted advance funding actuarial method using actuarial
5 assumptions and asset valuation methods.
6 (f) Total spending by the Commonwealth means all
7 appropriations and authorizations from all current funds and
8 funds created after the effective date of this amendment and
9 shall exclude refunds, servicing of bonded indebtedness incurred
10 prior to the effective date of this amendment and of voter-
11 approved bonded indebtedness, expenditures for funding the
12 unfunded pension liabilities existing on the effective date of
13 this amendment and the spending of revenues received by the
14 Pennsylvania Lottery. This section shall apply to all general
15 funds, all special revenue funds, all debt service funds, all
16 capital project funds, all internal service funds, all
17 enterprise funds, excluding the State Worker's Insurance, and
18 all agency funds, excluding the Deferred Compensation Fund, the
19 Deferred Compensation Short-term Portfolio Fund and the Medical
20 Professional Liability Catastrophe Loss Fund. This section shall
21 not be circumvented by creating new funds which are not included
22 in the spending limits delineated in subsection (a) or
23 transferring spending between funds. There shall be not
24 allocations or transfers of funds from the State Worker's
25 Insurance Fund, the Deferred Compensation Short-term Portfolio
26 Fund, the Medical Professional Liability Catastrophe Loss Fund,
27 any Commonwealth trust funds or Commonwealth pension trust funds
28 to any other Commonwealth fund.
29 § 20. Spending limitations for political subdivisions of the
30 Commonwealth.
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1 (a) Total spending by each political subdivision of the
2 Commonwealth shall not exceed the compound annual rate of change
3 for the two preceding years of the Personal Income by Place of
4 Residence for Pennsylvania as defined and officially reported by
5 the United States Department of Commerce. Spending in excess of
6 this limit may be changed by a majority vote of the electorate
7 of the political subdivision.
8 (b) If the duty of paying any cost or any portion thereof is
9 transferred from one level or unit of government to another, the
10 cost so transferred shall be deducted from the spending limit of
11 the transferor and shall be added to the spending limit of the
12 transferee.
13 (c) Future liabilities resulting from the adoption of or
14 contracting for new or improved deferred compensation or
15 benefits or pensions on or after the effective date of this
16 amendment shall be fully funded each in accordance with an
17 accepted advance funding actuarial method using actuarial
18 assumptions and asset valuation methods.
19 Section 2. The addition of sections 18, 19 and 20 of Article
20 VIII of the Constitution of Pennsylvania shall become effective
21 beginning with the first fiscal year commencing more than six
22 months following approval of these sections by the electorate.
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