Patrick M. Gleason

Connecticut Legislators Propose Income Tax Hike

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Posted by Patrick M. Gleason on Tuesday, May 5th, 2015, 12:58 PM PERMALINK

Last week, Connecticut legislators bucked Gov. Dannel Malloy (D), discarding his budget proposal in favor of a plan approved by the legislature’s Finance, Revenue, and Bonding Committee that raises taxes by $1.8 billion over the next two years. Most of the plan’s new revenue comes from an income tax increase.

The budget approved by Democrat lawmakers, who control the state house and senate, raises the top marginal income tax rate from 6.7 to 6.99 percent for individuals earning over $500,000 annually and couples with income in excess of $1 million. Connecticut lawmakers characterize this as a tax increase on the rich, but they neglect to acknowledge the harm this will do to small businesses.

According to IRS data, this income tax increase would hit over 6,800 Connecticut small businesses that file their taxes under the individual income tax system. However, that figure only accounts for sole proprietors. Including the share of small businesses made up of S-Corps and partnerships, upwards of 8,000 small businesses file under the individual income tax system in Connecticut and would be adversely affected by the budget approved by Democratic state legislators last week. If approved, the hike called for by the legislature it would be the fourth state income tax increase since the levy was instituted in 1991. Gov. Malloy signed the last income tax hike into law in 2011.

The Finance, Revenue, and Bonding Committee-approved budget also raises $730 million in new revenue by expanding the sales tax base to include previously untaxed services, applies a surcharge to capital gains, and delays scheduled tax cuts. Gov. Malloy was quick to criticize the Democrat-approved budget, as well as the tax hike-free Republican alternative.

Gov. Malloy’s budget also raises taxes, but not as much as legislative Democrats are calling for. Over the next month legislative leadership will work with the Malloy administration to reach a budget agreement. Unfortunately for Connecticut taxpayers, though they already face the third highest state and local tax burden in the nation, politicians in Hartford appear likely to approve further tax hikes this summer. The question in Connecticut appears to be how much, not whether, taxes will go up this year. 

Louisiana Labor Committee Passes Paycheck Protection Bill

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Posted by Patrick M. Gleason on Thursday, April 30th, 2015, 11:42 AM PERMALINK

A significant step toward greater worker freedom was taken today in the Louisiana legislature, where the House Labor Committee voted to approved House Bill 418, legislation that will end government withholding of union dues from public employee paychecks. 

If this bill is approved by the legislature and signed into law by Gov. Jindal, public employees in Louisiana will no longer be forced to fund union political activities against their will. Prior to the hearing, Americans for Tax Reform sent the following letter to committee members encouraging them to support this much-needed reform: 


To: Members of the Louisiana House Labor & Industrial Relations Committee,​

On behalf of Americans for Tax Reform and our supporters across Louisiana, I write in strong support of House Bill 418, legislation introduced by Rep. Stuart Bishop that would both increase worker freedom and get Louisiana government out of the business of acting as the money bagman for government employee unions and their political activities. By ending state withholding of union fees and dues from government employee paychecks, HB 418 will stop an indefensible use of state resources and give Louisiana public employees the freedom to decide whether or not they would like to join a union and fund its political activities.

HB 418 recognizes the right of workers to organize, but ensures that workers have freedom of association and are not forced to join and fund a union against their will. If passed, HB 418 will end the use of state resources to collect union dues via paycheck withholding. With passage of this important reform, no employee will be forced to see his or her money used to support a political cause he or she does not believe in.

If unions are providing a service to workers, then they will have no problem making the case for why workers should pay dues. However, research indicates that without proper safeguards, many workers are forced to give up hard earned wages against their will. A study by the Heritage Foundation found that states that passed paycheck protection laws like HB 418 saw union spending on political campaigns and activities fall by an average by 50% after such laws were enacted. This reveals that often the goals of the union leadership do not reflect the priorities of the workers. HB 418 would ensure that every Louisiana worker has the freedom to choose whether or not to support union political activities. When given a choice, it seems that many workers decide to not contribute to political activities that they were previously forced to fund against their will.

HB 418 saves taxpayer dollars by taking the government out of the dues collection business. No more administrative or financial resources will be used by state government to funnel money to unions that, in turn, often use that very money to work against the interests of Louisiana taxpayers. If the unions want the money, they will have to ask for it themselves.

In both principle and practice, HB 418 is a good reform that will expand economic freedom in Louisiana. Paycheck protection laws protect worker rights and taxpayer dollars; as such, I strongly urge you to support HB 418.  


Grover G. Norquist, President

Americans for Tax Reform

North Carolina Senators Propose Corporate Tax Relief

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Posted by Patrick M. Gleason on Friday, March 20th, 2015, 3:37 PM PERMALINK

North Carolina has received a lot of attention in recent years for the historic tax reform package approved there in 2013. This week, North Carolina senators introduced a proposal to build upon those reforms and make the state even more economically competitive.

On Wednesday, legislation was filed in the North Carolina senate that would cut the state corporate tax, which is currently 5%, to 4% in 2016, and 3% in 2017. The 2013 tax reform act brings the corporate rate down to 3%, but only if certain revenue targets are met. The bill filed this week, Senate Bill 338, would make sure that the corporate tax will go to 3% no matter what. This corporate tax reduction will increase the job-creating capacity of North Carolina employers and benefit the broader populace. The fact is that corporations don’t pay taxes, people do. Aside from the fact that the corporate tax is one of the most economically damaging forms of taxation, the burden of corporate taxes is borne by ordinary people in the form of reduced wages and shrunken 401Ks. This corporate tax cut would total $500 million per year once fully phased in. 

The senate plan would also change the formula under which the state corporate tax is calculated. The current formula is based on in-state payroll, property, and sales. The plan announced by Senate President Pro Tem Phil Berger this week moves the state corporate tax to a formula based only on in-state sales, commonly referred to as “single sales factor.” This is a good move from an economic standpoint, as the current formula penalizes companies that hire more workers or expand in-state operations. Moving to a single sales factor reduces this disincentive on in-state investment and payroll growth. It is for this very reason that lawmakers in neighboring Tennessee have introduced legislation year to move to a single sales factor corporate tax system.

Every state bordering North Carolina has a lower state and local tax burden. Legislators in South Carolina and Tennessee are moving to make their tax codes even more competitive by cutting income taxes this year. As such, it’s wise for North Carolina lawmakers to use the 2015 session allow individuals, families, and employers to keep more of their hard-earned income. The plan introduced in the North Carolina senate this week would do just that. 

Beer Tax Relief on Tap in Congress & State Capitals

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Posted by Patrick M. Gleason on Tuesday, February 24th, 2015, 12:51 PM PERMALINK

Nearly half of the cost of beer, over 40 percent, is the result of taxes. The federal and all 50 state governments assess targeted taxes on beer, which is borne by consumers in the form of higher prices. Fortunately, two bills were introduced last month in Congress to provide some needed relief: The Small BREW Act & The Fair BEER Act. 

For those who don't think the tax code should be used to pick winners and losers, the Fair BEER Act is the better of the two bills, as it reduces taxes for all breweries, while the Small BREW Act only applies to some breweries. Scroll down to read a recent column in Reuters by ATR's Grover Norquist and Patrick Gleason that explains the differences between these two bills, along with similar efforts to reduce beer taxes at the state level: 


Title: The most expensive ingredient in beer? It’s not hops, it’s taxes.

By: Grover G. Norquist & Patrick Gleason

Whether you like craft beer brewed in small batches or the mass-produced variety, the most costly ingredient that goes into every pint of beer in the United States is taxes. Between federal, state and local levies, taxes make up, on average, more than 40 percent of the cost of beer purchased in the United States. In an effort to reduce the excessive tax bite, two competing bills have been proposed this month on Capitol Hill, along with legislation at the state level.

One of the proposed bills, the Small BREW Act, would, if passed, provide targeted federal excise-tax cuts for beer made by domestic brewers, with tax relief based on volume. This bipartisan bill would change the definition of a small brewer.

The federal government now levies a $7 tax on each of the first 60,000 barrels produced by small brewers. After that, the tax spikes to $18 a barrel. Businesses not defined as small brewers — those that produce more than 2 million barrels annually — must pay the $18 federal tax on every barrel they make.

The proposed bill, however, would halve the tax for small brewers on the first 60,000 barrels to $3.50 a barrel and redefine a small brewer as a business producing fewer than 6 million barrels a year, as opposed to the current 2-million barrel standard.

Senators Ben Cardin (D-Md.) and Susan Collins (R-Maine) introduced this bill. It has 25 Senate sponsors from both parties.

A competing bill, the Fair BEER Act, would provide federal tax relief for brewers of all sizes that are headquartered both domestically and abroad. Brewers producing 7,143 barrels or less a year, which represents 90 percent of brewers — would be exempt from paying federal beer excise taxes.

Brewers who produce between 7,144 and 60,000 barrels would face a $3.50 a barrel excise tax. Production in excess of 60,000 and up to 2 million barrels would face a $16-a-barrel tax. An $18-a-barrel tax would apply to production beyond 2 million barrels.

This bill, introduced by Representatives Steve Womack (R-Ark.) and Ron Kind (D-Wis.) has 23 co-sponsors.

But not just lawmakers on Capitol Hill are looking to provide tax relief for beer drinkers. State legislators seek to reduce the excessive tax burden on suds. In addition to the federal excise tax, all 50 states apply punitive taxes on beer. Tennessee, for example, levies the highest excise tax on beer at $1.17 a gallon. Alaska comes in second, with a rate of $1.07 a gallon. Wyoming has the lowest beer excise tax, at $0.02 a gallon. Wisconsin and Missouri have the next lowest, at $0.06 a gallon.

CLICK HERE to read the rest of the column

ATR Urges South Carolina Legislators to Support Governor Nikki Haley's Proposal to Reduce the State's Income Tax

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Posted by Patrick M. Gleason on Thursday, January 29th, 2015, 2:14 PM PERMALINK

Some South Carolina legislators are trying to pass a gas tax hike and block the income tax relief plan put forward by Gov. Nikki Haley during her State of the State Address last week. Today, Americans for Tax Reform President Grover Norquist sent a letter to the South Carolina State Legislature urging legislators to support Governor Nikki Haley’s proposal to reduce the state income tax. The proposal would better allow the Palmetto State to compete with nearby states for investments and jobs.  

The letter reads as follows:

Dear Members of the South Carolina Legislature,

On behalf of Americans for Tax Reform and our membership across South Carolina, I am contacting you today to urge you to support Gov. Nikki Haley’s proposal to reduce the state income tax rate. There are two states in the region, Tennessee and Florida, that boast no income tax for individuals, families, and small businesses. North Carolina just cut their income tax so that it is now lower than South Carolina’s, and Georgia lawmakers are looking to follow suit. As such, it is imperative that South Carolina lawmakers use the 2015 session to cut the state income tax. Failing to do so will put the state at a disadvantage in the competition for jobs and investment.

Some legislators are proposing to raise the gas tax and ignore the proposal to cut the income tax. South Carolinians have been hit with over 20 federal tax increases in recent years; the last thing they need is another tax increase at the state level. That’s why it’s important that a gas tax increase be contingent upon the passage of an income tax cut. Otherwise, lawmakers will simply be voting for higher taxes.

Income tax relief isn’t just good politics, it’s good policy. Tax Foundation economist William McBride reviewed academic literature going back three decades and found, "While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions and monetary policy."

In McBride's survey of 26 studies, dating to 1983, he found "all but three of those studies, and every study in the last 15 years, find a negative effect of taxes on growth." John Hood, former president of the John Locke Foundation, found that keeping state and local tax and regulatory burdens as low as possible fosters economic growth, when he analyzed 681 peer-reviewed academic journal articles going back to 1990."Most studies find," Hood stated, "that lower levels of taxes and spending, less-intrusive regulation correlate with stronger economic performance."

I urge you to protect South Carolina taxpayers by voting for income tax relief this session. Americans for Tax Reform will continue to follow these issues closely throughout session and will be educating your constituents as to how you vote on these important matters.


Grover Norquist

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Nikki Haley Is Leading The Southern Tax Reform Charge

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Posted by Patrick M. Gleason on Wednesday, January 28th, 2015, 10:44 PM PERMALINK

Florida doesn’t have one. Neither does Tennessee. North Carolina just lowered theirs. These are some of the reasons why South Carolina’s seven percent top state income tax rate puts the Palmetto State at a regional disadvantage. The good news is Gov. Nikki Haley has a proposal to fix this problem, if the legislature will let her.

During her State of the State Address last week, Haley called for a significant income tax cut for individuals, families, and businesses across the state. Gov. Haley has proposed taking the top marginal income tax rate from seven to five percent, about a 30 percent reduction in the rate. Such a proposal would be good for the South Carolina economy. Gov. Haley, however, is running into resistance from her state legislature.

While Gov. Haley is trying to increase the disposable income had by individuals, families, and small businesses, some lawmakers in Columbia only want to do one thing – raise the gas tax.

Americans for Tax Reform urges South Carolina lawmakers to only vote for a gas tax increase if it is in conjunction with Gov. Haley’s income tax reduction. After more than 20 new or higher taxes signed into law at the federal level over the last six years, South Carolinians are in need of tax relief. Gov. Nikki Haley recognizes this, as is evidenced by her proposal to cut the state income tax.

If South Carolina lawmakers wish to raise the gas tax, they should only do so in conjunction with the income tax cut that Gov. Haley has proposed. North Carolina passed one of the most significant tax relief packages in 2013, taking their income tax rate down to 5.75 percent. It’s time for South Carolina to catch up. Gov. Haley’s proposal will do so, and ensure that South Carolina remains competitive regionally, nationally, and globally.


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ATR Applauds South Carolina Gov. Nikki Haley’s Call for Income Tax Relief

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Posted by Patrick M. Gleason on Thursday, January 22nd, 2015, 3:39 PM PERMALINK

Great news for South Carolina taxpayers. In last night’s State of the State Address, Gov. Nikki Haley proposed reducing the state’s top marginal income tax rate from 7.0 percent to 5.0 percent, a 30 percent reduction.

This income tax reduction, which result in more disposable income for individuals, families, and small businesses across the Palmetto State, will be a boon to the state economy. It’s also a much needed reform in light of the competitive tax codes had by neighboring states.

As Gov. Haley pointed out in her speech:

“Some southeastern and southwestern states – Tennessee, Florida, and Texas – have no income tax at all.  Georgia’s tax is a full percent lower than ours, and just last year North Carolina cut theirs by two full points, to below even that…In that competitive environment, our state’s 7% income tax rate stands out and puts us at a disadvantage. In order to keep the ball rolling in our economy, we must bring down our income tax.”

South Carolina’s status as a Right-to-Work state that frees workers from coerced unionization makes it an attractive location for new investment, business relocation, and the subsequent job creation that follows. However, the state’s tax code relative to its neighbors and other states across the country are holding it back from reaching its full economic potential. Gov. Haley is smart to propose doing away with that hindrance. Gov. Haley’s effort to reduce the income tax is supported by a wealth of research.

Tax Foundation economist William McBride reviewed academic literature going back three decades and found, "While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions and monetary policy."

In McBride's survey of 26 studies, dating to 1983, he found "all but three of those studies, and every study in the last 15 years, find a negative effect of taxes on growth."

John Hood, former president of the John Locke Foundation, found that keeping state and local tax and regulatory burdens as low as possible fosters economic growth, when he analyzed 681 peer-reviewed academic journal articles going back to 1990.

"Most studies find," Hood stated, "that lower levels of taxes and spending, less-intrusive regulation correlate with stronger economic performance."

“Gov. Nikki Haley has proven time and again to be a tremendous defender of taxpayers,” said Grover Norquist, president of Americans for Tax Reform. “This latest proposal demonstrates that she recognizes the need for pro-growth, rate-reducing tax reform. It also stands in stark contrast to President Obama, who used his recent address to call for hundreds of billions in higher taxes. Once again, Gov. Haley shows us that the best policy reforms are coming out of the states.” 

More from Americans for Tax Reform

Contrasting Records a Feature of the North Carolina Senate Race

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Posted by Patrick M. Gleason, Jorge Marin on Monday, July 21st, 2014, 10:00 AM PERMALINK

Most state legislatures have wrapped up their 2014 sessions and the November elections will be here sooner that many realize. North Carolina is one of the top political battlegrounds this fall, with embattled Senator Kay Hagan (D) fighting for her political life against her Republican opponent, North Carolina House Speaker Thom Tillis. Politico reported last week faces one of the toughest reelection races for any Senate Democrat this year, a true toss-up fight against North Carolina House Speaker Thom Tillis.”

Hagan has made clear that her campaign strategy is to score political points by painting Tillis as a conservative zealot whose record in the legislature is extreme. However, a look at the facts about Tillis’s top achievements as Speaker’s shows his record to be anything but extreme, and very much in line with pro-growth policies. Here are the highlights of what has been accomplished in the North Carolina legislature under the leadership of Thom Tillis:

  • Historic, rate reducing tax reform: last year Speaker Tillis helped bring the income tax rate down from a top rate of 7.75 percent to a flat rate of 5.75 percent, reducing taxes for all income levels. This pro-growth tax package relieved North Carolina of the dubious distinction of having the highest income tax in the Southeast and will provide North Carolinians with $6.475 billion in tax relief over the next 6 years. Tillis also cut the state corporate tax, one of the most economically damaging forms of taxation, from 6.9 percent to 5 percent. If revenue targets are met, the rate will go down to 3 percent by 2017.
  • Full repeal of death tax
  • Balanced the budget every year he has been Speaker
  • Since becoming Speaker in 2011, unemployment in North Carolina has gone from well above the national average to below it, from  9.7 percent to 6.4 percent.
  • North Carolina’s GDP grew by an average of 4.73 percent since Tillis became Speaker, while the nation as a whole grew by only 2.17 percent during the same period.
  • Last August, North Carolina enacted much-needed regulatory reform, which removed many of the state’s antiquated and burdensome regulations on businesses.
  • Tillis helped to shepherd through an expansion of the state’s school voucher program which has helped over 2,100 children escape failing schools and get a better education.


With a list of accomplishments like this, it’s going to be hard for Hagan to paint Tillis’s record as extreme, but it seems she is going to try. However, it’s not surprising that Hagan wants to focus on Tillis and not her own top legislative achievement, which is her vote for Obamacare and the 20 federal tax increases it imposed on North Carolinians.

A rally for Tillis supporters was held in Raleigh this past weekend (link). With state budget negotiations coming to a conclusion, North Carolina Republicans are now able to turn their attention to addressing the misinformation being spread by the Hagan campaign. Not all North Carolinians can keep their doctor under Obamacare, contrary to what President Obama and Sen. Hagan claimed. The good news is that they can elect a new senator this November.

Photo Credit: Mark Peterson

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NC Newspaper Issues Misguided Call for a Plastic Bag Ban

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Posted by Patrick M. Gleason, Jorge Marin on Tuesday, July 8th, 2014, 4:59 PM PERMALINK

Good intentions on the part of government officials often fail to beget good policy. Plastic Bag bans and taxes are no exception. While no statewide bag ban or tax has been imposed in the U.S., over 190 local bag taxes or outright prohibitions have, with Los Angeles being one of the most recent cities to go after plastic bags (never mind the City of Angels’ $7.7 billion unfunded liability).

This week the Raleigh News & Observer’s editorial board called on the Raleigh city council to impose either a tax or a ban on plastic shopping bags. Raleigh Councilman Bonner Gaylord recently indicated openness to a plastic bag ban or tax in North Carolina’s capital city. Such a proposal is misguided for a host of reasons that have been well-documented in other localities that have imposed such a policy.

Proponents of the plastic bag ban argue that by switching over to cheap reusable bags consumers can cut both costs and help preserve the environment. What they neglect to mention are the risks associated with the same reusable bags and the lack of connection between bag taxes and bans and litter reduction

A study on reusable shopping bags conducted by University of Arizona researchers found “Large numbers of bacteria were found in almost all bags and coliform bacteria in half,” posing an obvious health risk to consumers. The problem? Only 3 percent of respondents reported to washing their bags on a regular basis. Giving the documented failure on the part of many to wash reusable bags whose use the New Observer’s proposal would either mandate or incentivize, The News & Observer’s dubious proposal would expose many to a new source of potential bacterial infection.

While the coercive utopians on the News & Observer editorial board consider limiting consumer choice for the benefit of our surroundings, there is actually very little evidence that plastic ban or tax would actually reduce litter, which is the stated goal of the proposal.

After San Francisco issued its own plastic bag ban, the first city in the country to do so, the amount of bag litter as a share of all trash actually increased according to a city-wide litter audit from 20 to 24 percent. Ireland, a model of plastic bag taxing, provides one of the more glaring examples of failure to mitigate plastic bag use. While it seems like there was some negligible improvement in the amount of plastic litter, plastic bag consumption actually went up by 20 percent as households switched to heavier plastic bags to use around their homes. Meanwhile paper bag litter increased by an astounding 400%.

The thing is, the single use plastic bags that the News & Observer claims to be a scourge to the city (with no supporting evidence) are anything but single use. Plastic shopping bags are not just used to carry around groceries; most people reuse them for all sorts of activities, such as lining bins, cleaning up after the family pet and transporting lunch and gym clothes. By making it more difficult to procure these little industrial marvels, Raleigh might simply be making their city less accommodating to low income families rather than more friendly to seagulls and fishes.

The fact is that a bag tax would disproportionately harm low and middle income Raleigh families, yet the News & Observer’s proposal has been met with silence by groups like Blue NC and legislative Democrats, who fashion themselves and defenders of the downtrodden.

For these reasons, the Raleigh City Council would be wise to discard the News & Observer’s advice. Even California Democrats, who usually love such stupid and onerous policies, weren’t so foolish.

Photo Credit: Sergio Pani

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As Budget Deadline Looms, PA Lawmakers Look to Get Keystone State Out of the Booze Business

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Posted by Patrick M. Gleason on Wednesday, June 25th, 2014, 1:22 PM PERMALINK

Pennsylvania taxpayers should keep an eye on the state capitol this week, as commonwealth legislators work to reach a final agreement on the new state budget. According to sources in the legislature, the House will vote on a budget as soon as today that would include a provision to end the state’s 80 year monopoly on alcohol wholesale and retail operations. Americans for Tax Reform applauds House members for including this commendable reform in their budget. This will generate $400 million for the commonwealth in a way that does not raise taxes on already heavily-burdened Pennsylvania taxpayers, who currently contend with the nation’s tenth highest state and local tax burden.

Pennsylvania lawmakers are trying to close a $1 billion plus budget shortfall by next week’s budget deadline. However, Gov. Corbett indicated this week that he is prepared to go past the deadline if that is necessary to achieve needed pension reform and end the commonwealth’s archaic liquor monopoly. As ATR noted in a recent letter to Pennsylvania lawmakers, “There are numerous ways to balance the budget without resorting to tax hikes, but one of the best and most fiscally sound ways to work toward that goal is to get the state out of the liquor and wine business.” Ending the state liquor monopoly isn’t just good policy, it’s good politics, with recent polling finding widespread bipartisan support for liquor privatization.

ATR encourages the Pennsylvania Senate to follow the House’s lead in privatizing liquor and wine distribution and sales. The current state monopoly on the distribution and sales is clearly not a core function of government. It is amazing to have taken this long for even one legislative chamber to address it. If lawmakers in Harrisburg are able to balance the budget sans tax increases and get the state out of the liquor and wine business once and for all, members of the legislature will have a strong case to make to voters seeking fiscally responsible candidates in November who stand up for taxpayers.

With major issues like liquor privatization, pension reform, and paycheck protection all pending, Harrisburg is the state capitol to keep an eye on right now.


Photo Credit: Joey Rozier

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