The commonwealth’s Independent Fiscal Office has released a study on whether Governor Tom Wolf’s proposed revenues for next year’s budget are realistic.
There are some discrepancies between Wolf’s balance sheet and the IFO’s, but the office says for the most part, the governor’s projections are valid.
Wolf’s budget proposal seeks to balance a $3 billion structural deficit. He has said $2 billion of that would come from cost-saving measures, and a billion would come from new money, which is what the IFO analyzed.
Director Matthew Knittel noted that while there is a “difference of opinion” about how much it’ll cost to phase in certain revenue programs, the administration’s calculations are “reasonable.”
“Our findings are, the first year, that these proposals would generate about $944 million,” Knittel said, comparing his calculation to Wolf’s billion-dollar projection. “Once these proposals are phased in, five years from now, we think they would generate about $1.4 billion.”
The proposals include a tax on insurance premiums, a natural gas severance tax, a corporate sales tax expansion, a minimum wage hike, and a gambling expansion.
Knittel cautioned, those revenues could fluctuate. He said the severance tax specifically could make up to a billion dollars per year, but could also swing hundreds of millions lower depending on gas prices.
The GOP-controlled legislature has generally opposed all tax increases. House Republicans’ recently-introduced version of the budget does away with most of the new revenues, instead balancing the plan on deep cuts.