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