Gov. Tom Wolf is set to give his budget address to Pennsylvania’s General Assembly Tuesday morning, and lawmakers are expecting significant tax changes, in addition to the plans already shared by the governor.
Wolf, who has said he’ll seek a 5 percent tax on natural gas drillers, intends to rework the state’s corporate tax infrastructure. Many are bracing for other tax hikes to help overcome a roughly $2 billion projected deficit and deliver on Wolf’s promise to boost state funding for education. The commonwealth is also facing rising health care costs and pension payments.
Democrats say they’re expecting an income-tax exemption aimed at middle-income earners, and some kind of property tax-relief plan.
Last week, Democratic Senate Minority Leader Jay Costa said any possible income and sales tax changes will have to be judged in context of the governor’s entire proposal.
“The question becomes to what degree are we increasing it, and how much relief, how much property tax relief we’re getting,” said Costa. “But on the sales tax side of the equation, the issue becomes, are we expanding the base, or are we just raising it?”
Republicans are also suspending judgment, especially on Wolf’s proposal to lower the state’s notoriously high corporate net-income tax while trying to stop businesses from escaping state taxes.
“The devil’s in the details. We’re going to have to see what exactly he’s proposing,” said GOP House Majority Leader Dave Reed. “But, certainly, if we can get into a situation where we’ve got a fair system in Pennsylvania that can create economic development, he’ll have a willing partner in that discussion.”
When Wolf delivers his budget address to a joint session of the Legislature, he will have invited every lawmaker to the governor’s residence for what the administration has called “listening sessions.” Wolf said those meetings have left him feeling optimistic about the negotiations ahead.
“We really all want to make Pennsylvania better,” said the governor last week. “I’m hoping we can all build consensus on the budget based on that overarching agreement on goals, long-term goals.”