Tuesday, October 6, 2015

Wolf Submits Budget Plan To House For Vote Wednesday

Gov. Wolf Tuesday joined House Democratic Leadership in proposing an amendment in the House to fix the Commonwealth’s structural budget deficit, fund K-12 education and provide expanded property tax relief to seniors and disabled households.
A summary of amendment A03468 House Democrats plan to offer to House Bill 283 (F.Keller-R-Snyder) Wednesday is now available.  Click Here for a draft of the budget amendment.
“Pennsylvania needs critical revenue to fix our structural budget deficit without gimmicks. We need to make sure oil and gas companies pay their fair share so we can restore the drastic cuts made to education, and seniors and disabled households desperately need relief from skyrocketing property taxes that resulted from underfunding education,” said Gov. Wolf. “If we do not fix our deficit, our credit rating will be downgraded to junk status and we will be forced to cut more funding from education. More education cuts will lead to the layoffs of more educators, further increases to class sizes and skyrocketing property taxes. We must get Pennsylvania’s financial house in order and invest in our future. The plan filed today gives the Commonwealth an opportunity to move forward and away from the failed status quo.”
Summary Of Plan
-- Taxes
-- Increases the Personal Income Tax from 3.07 percent to 3.57 percent, but is not proposing any increase in the Sales Tax or its exemptions.  He would also dropped proposals for higher business and cigarette taxes.
-- Enacts a severance tax of 3.5 percent + 4.7 cents per thousand cubic feet. This proposal would leave the impact fee completely in place.
-- Eliminates school district property taxes for 216,344 new senior households and 30,915 new disabled households.
-- Property Tax Relief or Elimination for Senior Citizens and Disabled Households:
-- An increase in the Personal Income Tax to 3.57 percent will have little impact on seniors, who do not pay income tax on retirement income. Additionally, this proposal provides expanded property tax relief for seniors, people with disabilities, and veterans:
— Expanded eligibility to assist 569,000 senior citizens and disabled.
— Eliminate school district property taxes for a total of 331,000 senior citizens and disabled.
— Increased rebates for all eligible applicants up to a maximum of $2,000.
— Excludes all veteran disability benefit payments from income eligibility calculation.
-- Tax Forgiveness for Working Families:
-- The special tax forgiveness program will be expanded to benefit 426,000 households.
Under the expansion, a family of four earning $36,400 and a family of six earning $55,400 would pay no state income tax.
-- Severance Tax/Natural Gas Royalties:
-- Enacts a severance tax of 3.5 percent + 4.7 cents per thousand cubic feet which is less than the 5 percent tax he proposed in February with the same 4.7 cent additional fee.
-- Leaves the current Act 13 drilling impact fee in place and untouched.
-- Allows drillers to deduct post-production costs.
-- Guarantees leaseholders minimum 12.5 percent royalty payments.
The proposals are expected to raise $1.4 billion in FY 2015-16 to close what Wolf said is a structural deficit and provide an additional $400 million in education funding.
Click Here for a summary of the proposed amendment prepared by House Democratic Appropriations Committee staff.   Click Here for a draft of the budget amendment.
The House returns to session Wednesday at 9:00 a.m.
House GOP Leader Plays What-If Game On Wolf’s Tax Plan

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