PA-BGT: So Close, Yet So Far

wolf-budget addressThe clock is running out on Gov. Tom Wolf and GOP leaders as they try to end the 20-week budget impasse by Thanksgiving.

The first-year Democrat and Republican legislative leaders are ironing out details on a deal that would bring in an additional $2 billion for the fiscal year that started July 1. Under the agreement, $400 million in additional funding will be plowed into the state’s school system, with homeowners set to see their property taxes rolled back.

The deal does not contain a natural gas severance tax but does include a 1.25% increase in the sales tax statewide, which some Democrats in the General Assembly see as a “red flag” for a regressive tax code, Marc Levy of the Associated Press reports.

“That’s a lot to ask a Democrat to vote for that,” State Sen. Daylin Leach said. “We usually ask Republicans to vote for that.”

Wolf is willing to give up on the severance tax to bring Republicans on board with his effort to close the gap between PA’s rich and poor school districts.

The economic disparities in the state’s school system are among the nation’s worst, but it’s unclear whether the latest proposals will reduce that gap. Under Wolf’s plans, Philadelphia’s school system would receive 14% of the state’s education funding. Philly schools would receive less than 5% under GOP proposals.

GOP legislators in wealthier districts are concerned about becoming “donor districts” that send more money to Harrisburg than they receive in funding.

“My concern with a shift to sending our dollars to Harrisburg is they get put through some funky formula and we don’t get dollar-for-dollar back,” Bucks State Rep. Marguerite Quinn told the AP. “So I’m a proponent of the local control with it.”

Even if Gov. Tom Wolf and top Republicans can reach an agreement, it’s unclear whether enough legislators will vote for it.

10 Responses

  1. Regressive taxation is unacceptable for a middle class struggling with low wages. The income tax is regressive on the PA schedule. The sales tax is regressive. ERGO: The severance tax on natural gas extraction is the fairest source for school funding and property tax reduction. Sin taxes and other revenue streams of course can be considered.

  2. Jason Addy – be clear: it is NOT a 1.25% increase, it is a nearly 21% increase – moving up 1.25 percentage points. BIG difference.

  3. David Diano, are you serious? A Representative actually “representing” their district and you call it racist? I’m sure all the Philly Dems will be for this bc it means more for THEIR districts…does that make them racist against majority white districts? The fact is that areas like Quinn’s – and most of the Philly suburbs – already get back next to nothing for education from the taxes they send to Harrisburg. That money is already going to Philly, etc. These people choose to ALSO add higher local school taxes to their burden to help their schools. Her saying she wants to do her job and make sure the people she represents aren’t shafted by the state any more than they already are is probably one of the most refreshing things heard from anyone in Harrisburg during this debacle.

  4. The Dems in the House and Senate should do themselves a favor and reject this budget. The sales tax will come back to haunt them and the governor at election time–it is a gift that will keep on giving for the Republicans. No severance tax, no deal.

  5. The current impact fee doesn’t yield the kind of revenue a severance tax would. It results in half the amount a 5 percent severance tax yields in West Virginia. 3.1 billion cubic feet of gas was extracted from Pa’s 4904 wells in 2013 would have resulted in about $425 million for 2013-14 if West Virginia’s gas policies had been copied. Range Resources stated that targeted drilling in the Marcellus Shale drove their production growth in its 2012 SEC report. “Most energy analysts consider the Marcellus wet and super-rich area in area in southwest Pa to be some of the most economical gas plays in the US.” The Commonwealth is overlooking an incredibly lucrative source of revenue. Pa’s fee structure equates to an effective tax rate of 1.3%. With natural gas deposits trapped in the Marcellus & Utica shales that lie below half the state, gas production won’t slow significantly despite price drops in the cost of natural gas because they are within “some of the most economical gas plays in the US”. Keep in mind that corporate net-income tax is only paid by companies tat incorporate. Companies registered as a limited liability or subsidiary pay the personal income tax rate. From 2008 to 2013, the number of corporations in the shale gas industry dropped from 317 to 240. During the same period, the number of gas-related companies paying the personal income tax rose by 25%, to 792.

  6. Calling her statement selfish is being too kind. Probably she would want the poor districts to be donor districts to take the tax burden off rich districts.

  7. DD, Her districts ratio of German decedents to polish decedents is 4-1, sounds to me like she doesn’t want to send money to poor polish Americans….

    Or

    Her district has one of the largest Jewish populations in the state, maybe she doesn’t want to share all that jewish wealth with non jews…

    or

    Bucks is 4.1% Asian while the rest of PA is only 2.8%, Maybe she doesn’t want to give money to non Asian parts of the state.

    Either way DD and I agree, the issue is obviously a racist and not that she is making her district a priority over other districts, regardless of race.

  8. “GOP legislators in wealthier districts are concerned about becoming “donor districts” that send more money to Harrisburg than they receive in funding.”

    It’s called being selfish.

    Quinn is in the 143rd, which has a white to black ratio of about 75-to-1. So, her statement seems like code for: we don’t want the money going to blacks through a fair funding formula.

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