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PA-BGT: Budget Agreement to Include Sales Tax Increase, ‘Historic’ Education Spending

pa-state-capitol-b175d9a07740ecf3After 19 weeks of negotiations, state officials are finally on their way to a comprehensive budget agreement.

The latest attempt to end the budget impasse will see both sides making several major concessions, Marc Levy and Mark Scolforo of the Associated Press report.

Under the proposal, Gov. Tom Wolf fulfills his biggest campaign promise, bringing in $350 million – a 6% increase – in new money for the state’s school systems. However, the first-year Democratic Governor is willing to cede on another key piece of his platform – a natural gas severance tax.

GOP leaders are also willing to give Wolf a piece of the multi-billion dollar tax increases he insisted on, with the state sales tax set to go up 1.25% to 7.25%. The sales in Philadelphia will rise to 9.25% (from 8%), while Allegheny County’s rate will hit 8.25%.

Spending under the yet-to-be-agreed agreement totals $30.7 billion, a 6% increase fueled by $500 million in slot-machine gambling revenue, which is currently distributed to school districts who pass it along to homeowners through property tax cuts.

Liquor privatization has not yet been part of the latest round of negotiations but is expected to be a part of the final budget, in some form. GOP leaders are also pushing forward with pension reform plans while negotiations continue.

“Nothing is agreed to until everything is agreed to,” Sen. Majority Leader Jake Corman told the AP. “We’re trying to put a framework together that will move us forward to get to a final agreement.”

On Friday, House Majority Leader Dave Reed told his Republican colleagues the progress could lead to a budget agreement by Thanksgiving.

26 Responses

  1. A depressing day when republicans in the condition are so buy by the chat manufacturing that the merely method they will add to financial hold up for learning is on the back of middle and near to the ground profits Pennsylvanians.
    who can write my essay

  2. Appropriating more money to the failed education system is nothing more than a payoff to the unions and is analogous to throwing good money into fixing a dilapidated car that is beyond repair.

  3. Bob Guzzardi:
    Your claim that higher taxes will result in higher gas prices is a dubious proposition. Exactly how much more would gas cost with a severance tax? Bet you don’t know. My bet is negligible. You belong to the “pass the tax on to the consumer” crowd, a group derived from ‘economists’ like Rush Limball. Gas companies need to pay their fair share. Will your grandkids like paying the environmental cost caused by tens of thousands of drilling holes whose concrete casings will assuredly break apart over the coming decades and century resulting in toxic leaks into our underground water supplies, streams, and methane emissions into our atmosphere? Who will pay for that?

  4. I supported Tom Wolf, but I am very disappointed that he’s willing to raise a most regressive tax — the sales tax — while the natural gas industry gets off free. The solution to Pa’s revenue-expense problem is a graduated income tax. Perhaps with a new Supreme Court, the argument in favor of it will finally win out.

  5. Republican House Majority Leader Dave Reed is driving this sellout of The Forgotten Taxpayer. Where does money come from? Higher taxes on natural gas energy mean higher energy costs for residential and business consumers, slower economic growth,fewer jobs and a general decline in the standard of living. What is so useful about another energy tax. Corbett’s tax/fee is enough.

    HA! ” corresponding property tax relief”; we have heard this before. Sold out by the Republican Establishment leadership again. two faced, double talking back stabbers. Let us hope that any Republican who votes to raise taxes gets a primary challenger but I am not optimistic.

  6. All of us who have an income, in any form use that money to pay bills or buy things. Just like the PA. government. When my bills or purchases exceed my income, I have to adjust how much I pay or how much I spend. I cant just force some one to give me more money so I can continue misspending. If we the public continue supporting any type of increase in taxes of any form, We set the precedence that it is OK to raise taxes anytime the state needs more money. I’m not getting any more, therefor I cant give anymore.

  7. Gas tax gas tax blah blah. What r u going to tax. Prices are at an all time low. You’ll just drive jobs out of the state. Wait for price to rebound. Think people think.

  8. Aside from atrocious spellings in some comments, it is good to read a real debate rather than the infantile personal insults usually found. It must be a good compromise, since nobody on either end of the political spectrum likes it. I do not. I agree with those who point out the GOP sold out the middle class and poor with higher sales tax rather than put ANY tax on the gas severance to keep the corporate donations coming. The bottom line is just same old same old political manipulations.

  9. The pention issues are the sole responsibility of the Polititions who stole the money from the security of the pention plan, remember they make the laws that allowed them to steal it and not replace what was taken.

    Second, And Gas tax or Fee paied by the Corporate Gas industry Is then passed on to the Tax payers, Its always been that way and will always continue ( Get a Clue ) The Gas Tax was just a Bluff to the Ignorant.

    The strings need to be cut from the Goverment and corporate influences!!! Otherwise Us tax payers will continue to take it on the CHIN…….

  10. Where/ how is the budget deficit addressed? Is Jake Corman trying to sound like Yogi Berra?

  11. Tax and spend. Always the government way. The sales tax increase will hurt the poor and middle class the most. Plus all the new things that will be taxable now. How about cut spending first? And don’t say we can’t! In every government there is plenty in waste! More online and out of state spending now. Democrats and Republicans are one in the same, TAX AND SPEND IS ALL THEY KNOW! Anyone who votes for this loses my vote. The fracking tax would also have been put on us as we know corporations and politicians don’t pay taxes, the taxpaying middle class does.

  12. Philadelphians, citizens of the poorest large city in the US, will pay an almost 10% sales tax so that natural gas drillers don’t have to pay taxes?

    Why can’t natural gas companies pay their fair share? Why does everyone else have to cover it for them?

  13. Waiting for the final details to make a judgement on this. Need to see privatization of liquor stores. 7.25% sales tax will motivate me to do more shopping in Delaware and not just for my liquor. Any solution that keeps the property tax in place, albeit slightly reduced, while raising other taxes is a BS proposition. It will only be a couple of years that they will come back and raise the property tax to where it was and then you will not only have the property tax but new ones to boot.
    Need to see how this addresses the long term unfunded pension liability problem.If this agreement does not bend this cost curve, this is nothing more than a short term patch.
    Hate to see Pennsylvania turn into another typical northeastern state(New York, New Jersey)with high taxes on everything. Waiting for the wife to retire and head west/southwest where they haven’t lost their minds.

  14. Let the budget show STRONG enforcement for 12 1/2% minimum royalty clause, as nothing has been done by the legislature! It’s time. Why no severence tax??

  15. Diano the state would be out of money in a matter of months if fracking was ever banned. Pa holds huge royalty interests in oil and gas wells. Get a clue nutbag.

  16. This has to be some sort of trial balloon. Any Republican who votes to raise the sales tax 21% will face a primary challenge. Does anyone actually believe that the school districts will pass this along through property tax cuts? Get real.

  17. A sad day when republicans in the state are so bought by the gas industry that the only way they will increase funding for education is on the backs of middle and low income Pennsylvanians.

    I’ll be waiting to see the rest of the details. At the very least it’s good to see an attempt at governance rather than just kicking the can down the road.

  18. The GOP is going to use the sales tax increase against Wolf in 2018 gov campaign.

    The severance tax would have been more responsible.

    Well, since Wolf has abandoned that, he’s got no reason to keep fracking legal in PA. He should read the environmental reports, and do what N.Y. did, and ban fracking.

  19. How quickly we forget – the gas fee! Where were the complainers when Corbett gave Pennsylvania a fee – that not only affects gas, but our car registration. I guess a fee is different then a tax.

  20. One can only hope that after giving Wolf a 21% increase in the sales tax both liquor privatization and pension reform will be a check.

  21. Any Republican who supports a net tax increase needs (and will likely get) a $500,000 funded primary challenge.

    Luckily, the timing is perfect to pull this off.

  22. this is dare i say a pretty decent budget. swing and a miss on the gas tax but education gets funded all the same. liquor and pensions check check, trade off sales for property tax.

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