Wolf’s budget proposal would raise taxes
Governor Tom Wolf’s administration revealed key pieces of his forthcoming budget Tuesday, proposing to balance it with $3 billion in personal income tax increases.
Administration officials told The Associated Press that the PIT increase from 3.07 percent to 4.49 percent would exempt the state’s lowest earners (about 40 percent of workers). The top third would pay more.
The governor wants to direct most of the extra money to public schools; and use the rest to plug a pandemic-induced budget deficit. It’s a hard sell for Republican majorities in the General Assembly, however, who haven’t authorized a PIT increase since 2004.
“Proposing middle-class tax increases in the middle of [a] pandemic shows how out of touch Gov. Wolf is; and how he isn’t taking Pennsylvania’s return to normal seriously,” said Jason Gottesman, spokesperson for the House Republican Caucus and its Majority Leader Kerry Benninghoff, R-Bellefonte. “It’s good the Governor is presenting his budget by video or he would be laughed out of the Capitol.”
READ: Boockvar to resign
The state faced a $3 billion deficit in 2020 as economic shutdowns gutted businesses, closing some forever. More than 2.6 million residents have sought jobless benefits since March.
The Independent Fiscal Office projects the pandemic’s economic damage will create a $2 billion structural deficit. That deficit will persist for years, according to the IFO. Some of the 450,000 jobs lost will never return.
Natural gas severence tax proposed
The news comes after Wolf said last week he believes a severance tax on natural gas could fund workforce development and infrastructure improvement projects. He also wants to legalize adult-use cannabis, which he says could generate additional tax revenue for the state. Both remain non-starters for GOP leaders.
Senate Majority Leader Kim Ward, R-Greensburg, said the governor should focus instead on vaccine administration. The state currently lags behind federal targets. Bennighoff shared in those sentiments last week.
“Governor Wolf must focus on the immediate issues at hand; getting our vulnerable population vaccinated and economy back up and running,” Ward said.
Wolf will release a recorded version of his annual budget address on Wednesday. The administration delayed its release one day after a Nor’easter dumped two feet of snow across the eastern half of the state.
Christen Smith follows Pennsylvania’s General Assembly for The Center Square. She is an award-winning reporter with more than a decade of experience covering state and national policy issues for niche publications and local newsrooms alike.