(July 2003) About 50 years ago the late U.S. Senator Everett Dirksen said this about government spending, "A billion here, a billion there, and pretty soon you’re talking about real money." Even today, a billion dollars ($1 billion) is still "real money." As Pennsylvania’s policymakers try to figure out how to lower school property taxes by that very large amount, IssuesPA puts a billion dollars into perspective by answering five questions.
1. In Pennsylvania government terms, how big is a billion dollars?
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It would raise the state’s general fund budget 4.7%.
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If spent on education, it would increase the state’s subsidy 25%.
2. If Pennsylvania didn’t have slots, how else could its state government raise $1 billion?
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It could increase the state personal income tax rate from 2.8% to 3.2%.
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It could increase the state sales and use tax rate on purchases from 6% to 7%.
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It could increase the state corporate net income tax from 9.99% to 16.9%.
3. How could Pennsylvania’s state government raise $1 billion from other "sin taxes?"
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It could increase the cigarette tax from $1.00 per pack to $2.18 per pack (assuming the number of packs sold wouldn’t decline due to higher prices).
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It could require beer drinkers to pay a tax of $2.60 per gallon of beer, versus the current 13 cents per gallon.
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It could require state liquor stores to collect a 114% tax on liquor, up from the current 18%.
4. For slot machines in Pennsylvania to raise $1 billion in taxes, gamblers would have to wager $30 billion. In Pennsylvania, what is $30 billion?
5. To yield $1 billion in annual tax revenues from slot machines, individuals would have to lose $3 billion at gaming establishments in Pennsylvania. What is $3 billion in Pennsylvania?
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It’s just a little less than the total market value of all real estate in Cambria County, including the City of Johnstown.
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It’s more than the combined total market value of all properties in the cities of Lancaster and Reading.
Real money? Yes!
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