Click here to subscribe today or Login.
True to his campaign image, Gov. Tom Wolf took a different approach to governing and drew up a proposed state budget that’s unlike anything Harrisburg has seen for a long time.
His $29.9 billion spending plan, announced Tuesday, would raise and/or alter taxes of all sorts (from sales to school property) and steer more money into education.
Described by people in the Democratic camp as “bold,” the governor’s first budget surely will shake up things at the Capitol for a few weeks. But it remains to be seen if it can loosen many lawmakers’ long-held assumptions and gain significant support among the Republican-controlled General Assembly. The state’s budget deadline is June 30.
On the bright side, Wolf’s blueprint offered so many initiatives, appealing to a mix of ideologies, that the GOP didn’t dismiss it out of hand. Perhaps that’s due to a wave of bipartisanship spirit. More likely, it’s a recognition on the part of most people, including elected officials, that Pennsylvania hasn’t bounced back from the Great Recession, but rather continues in many respects to slip behind.
For taxpayers footing the bills, and feeling shortchanged, there’s a desire to see better results. Wolf’s budget will spur an overdue conversation among constituents and their elected leaders on what can be done to propel Pennsylvania past the doldrums.
• Wolf’s proposal would increase state spending for general expenses by about 3 percent. However, if the costs of school property tax relief and pension obligations are part of the equation, the increase is closer to 16 percent.
• The state sales tax, unchanged for nearly half a century, would rise from a rate of 6 percent to 6.6 percent. Plus, exemptions for certain products, including newspapers, and services would be eliminated.
• The personal income tax rate would increase from 3.07 percent to 3.7 percent. The last change to this flat tax occurred 11 years ago.
• School property taxes would be reduced, or in some cases eliminated. Rebates would be extended for renters with incomes up to $50,000.
If all of his tax proposals were adopted, Wolf estimated, the total tax burden of an average, middle-class homeowner would drop by 13 percent.
• To encourage business growth in the Keystone State, the corporate income tax rate would be lowered from nearly 10 percent to 5.99 percent.
A tax overhaul of this magnitude requires careful consideration. Wolf’s good intentions need to be weighed against real-world implications, including potential unintended consequences. The debate shouldn’t begin and end with knee-jerk responses about “tax and spend,” nor should it be strictly defined along party lines.
Let’s hope lawmakers earnestly sift through Wolf’s proposal, seizing on those areas where there is common ground and a clear chance for improvement.