(The Center Square) – Pennsylvania Gov. Tom Wolf’s administration revealed key pieces of his forthcoming budget proposal on Tuesday that would generate $3 billion in revenue through a personal income tax raise.
Administration officials told The Associated Press that the PIT increase from 3.07 percent to 4.49 percent would exempt the state’s lowest earners – about 40 percent of workers – while the top third would pay more.
The governor wants to direct most of the extra money to public schools and use the rest to plug a pandemic-induced budget deficit – but it’s a hard sell for Republican majorities in the General Assembly, who haven’t authorized a PIT increase since 2004.
“Proposing middle class tax increases in the middle of [a] pandemic shows how out of touch Gov. Wolf is and how he isn't taking Pennsylvania's return to normal seriously,” said Jason Gottesman, spokesperson for the House Republican Caucus and its Majority Leader Kerry Benninghoff, R-Bellefonte. “It’s good the Governor is presenting his budget by video or he would be laughed out of the Capitol.”
Senate President Pro Tempore Jake Corman, R-Bellefonte scoffed at the idea of raisint taxes mid-pandemic, especially for small business owners after a year of state-forced shut downs.
“The governor’s latest tax scheme would be a fatal blow for many employers across Pennsylvania," he said. "The budget he is presenting is completely unsustainable, totally irresponsible and absolutely crippling to the state’s economy. Now is not the time to ask Pennsylvanians to send more of their hard-earned dollars to Harrisburg.”
The state faced a $3 billion deficit in 2020 as economic shutdowns gutted businesses, closing some forever. More than 2.6 million residents have sought jobless benefits since March.
The Independent Fiscal Office projects the pandemic's economic damage will create a $2 billion structural deficit that will persist for years. Some of the 450,000 jobs lost will never return.
The news comes after Wolf said last week he believes a severance tax on natural gas could fund workforce development and infrastructure improvement projects, while legalizing adult use cannabis could generate additional tax revenue for the state. Both remain non-starters for GOP leaders.
Instead, Senate Majority Leader Kim Ward, R-Greensburg, said the governor should focus on vaccine administration as the state lags behind federal targets. Bennighoff shared in those sentiments last week.
"Governor Wolf must focus on the immediate issues at hand; getting our vulnerable population vaccinated and economy back up and running," Ward said.
Wolf will release a recorded version of his annual budget address on Wednesday. The administration delayed its release one day after a Nor’easter dumped two feet of snow across the eastern half of the state.