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Pa. GOP at a crossroads

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By Lowman Henry
Monday, June 9, 2014, 9:00 p.m.

Ronald Reagan's national career was launched in the closing days of the 1964 presidential campaign with his “A Time for Choosing” speech on behalf of Barry Goldwater. It failed to turn the electoral tide, but did become the rhetorical foundation of the Republican Party for the decades that followed.

Pennsylvania Republicans now find themselves at their own “time for choosing.” The next few weeks will give definition to what it means to be a Republican in Penn's Woods.

At issue is the annual state budget, which is required to be in place on June 30. Election year spending pressures and a revenue shortfall are complicating the process. For six months the state has failed to achieve its revenue projections, creating a $532.5 million deficit. Add in proposed additional spending, and the deficit facing the governor and lawmakers climbs to over $1 billion.

Republicans control the governor's office, the state House and state Senate. To the unsuspecting, this should amount to easy sailing for the new budget. But the party is divided on how to proceed. The governor and a majority of the conservative House are opposed to higher taxes; a faction in the state Senate is open to additional revenue.

A number of legislators from Southeastern Pennsylvania —- the Philadelphia suburbs — are labor union-supported tax and spend liberals. Those hailing from the balance of the state, particularly the central Pennsylvania “T” and Southwestern Pennsylvania, are economically conservative. It is this divide over which the battle for the soul of the state GOP is being fought.

In trying to improve the state's business climate, Gov. Tom Corbett has opposed adding an extraction tax on Marcellus shale companies. Those businesses already pay the same taxes as every other Pennsylvania business plus an impact tax enacted several years ago. An extraction tax would be piling on.

Moderate Southeastern Republicans, led by Rep. Gene DiGirolamo of Bucks County, are advocating for an extraction tax. They also want to halt the phase-out of the Capital Stock & Franchise Tax, an arcane bit of double taxation on businesses found in no other state that instantly makes Pennsylvania less competitive in attracting investment and jobs. Mr. DiGirolamo has gone so far as to offer his own version of the state budget, which appears to be little more than the Democrat budget on new letterhead.

The GOP's “time for choosing” is this: Will the party hold the line on taxes and continue to enact policies that encourage business growth and job creation, or will it allow the southeastern tail to wag the dog and become Democrat lite?

Ronald Reagan once warned the GOP that “A party cannot be all things to all people. It must represent certain fundamental beliefs. ... (It must) raise a banner of bold colors, not pale pastels.” If the Republicans in state government settle for “pale pastels,” there will be little to distinguish them from the Democrats and voters will opt for the real thing.

The time has come for the GOP to act on its pro-growth principles. Otherwise, what is the point of even having principles?

Lowman Henry is chairman and CEO of the Lincoln Institute and host of the weekly “Lincoln Radio Journal.”

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