AP: Wolf's Plan Seeks Higher Income, Drilling Taxes
HARRISBURG, Pa. (AP) - Gov. Tom Wolf wants a half-point increase in the state's personal income tax and a new extraction tax on natural gas drilling in an effort to solve the state's 3-month-old budget impasse, according to an administration document obtained Tuesday by The Associated Press.
Basic details of the proposal, which Wolf planned to formally submit later in the day, also include cuts for seniors and disabled people in the property taxes that fund public schools. The administration said the new money will close the deficit and add about $400 million annually for basic education.
Republican leaders have offered to hold a vote as a way to demonstrate that the governor's proposal for higher taxes lacks sufficient support in the Legislature, where Wolf's Democratic allies are in the minority in both chambers.
The state income tax rate would increase from 3.07 to 3.57 percent, while the natural gas drilling tax would be 3.5 percent, plus 4.7 cents per thousand cubic feet. The state's existing impact fee on gas drilling, which is targeted to areas where the activity occurs, would be untouched.
The administration said the tax package would raise more than $1.4 billion for the fiscal year that started July 1, and more than $2.4 billion next year.
An estimated 216,000 seniors and 31,000 households with disabled residents would see their property taxes eliminated, bringing the new statewide total to 331,000 households that would not have to pay the despised levies.
Wolf decided not to propose any increase in Pennsylvania sales tax rate, currently 6 percent in much of the state, nor is he seeking an expansion of the list of items the sale tax covers as he had previously supported. He also has dropped proposals for higher business and cigarette taxes.
The budget document says the revenue he wants would be enough to balance the budget this year and in 2016-17, and it would pump new money into cash-strapped county human services programs.
Wolf has been scrambling to line up support for what could be a key test vote in the state House on Wednesday.
The governor told reporters Tuesday that a budget that passed the Legislature in late June without a single Democratic vote - a budget he vetoed - was not be balanced and would result in deep cuts to education spending along with higher borrowing costs.
More details about Wolf's plan were expected to be released when it gets introduced as an amendment in the Legislature by 2 p.m. Tuesday.
(Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)