Pa. Gov. Wolf pushes ‘broad-based tax increase’ to avoid $2B deficit
HARRISBURG — At a critical point in the 97-day budget stalemate, Democratic Gov. Tom Wolf and House Democrats on Tuesday will present a revised tax increase plan that Wolf considers necessary to close a $2 billion-plus deficit and boost funding for education.
It’s all-or-nothing stakes.
If Wolf succeeds in a vote scheduled for Wednesday, he’ll get the spending plan he wants. For House and Senate Republican leaders, who oppose Wolf’s plan to raise broad-based taxes, it’s a chance to defeat higher taxes or at least show Wolf that he does not have the votes.
“For both sides, it’s absolutely critical,” said Gerald Shuster, professor of political communications at the University of Pittsburgh. It’s the first sign both sides are taking real steps to try to resolve a dispute that, by law, was supposed to end with a budget in place by July 1.
“It’s a sign both may be willing to compromise,” Shuster said. “Both sides can ill afford to play the waiting game any longer.”
If Wolf fails, “he’s got to realize asking for 14 percent more (in income) from everybody is not going to become a reality,” said Jennifer Kocher, a spokeswoman for Senate Republicans.
Republicans are working with a Sept. 11 plan they say Democratic leaders claimed almost all 84 House Democrats would support. It would raise the income tax from 3.07 percent to 3.49 percent. It would expand the 6 percent sales tax by broadening its base, adding items and transactions including book and music downloads, cable TV, dry cleaning, amusement and recreation.
Wolf still wants an extraction tax on natural gas to help boost education funding — a centerpiece of his 2014 campaign.
Most of the talk internally Monday focused on the personal income tax, cigarette tax increases, and the Marcellus shale gas extraction tax, a Democratic staffer said.
“There is no final amendment yet,” said Jeffrey Sheridan, Wolf’s spokesman.
A GOP-crafted budget that Wolf vetoed in July didn’t close the deficit and “was not honest,” Wolf told reporters during a morning news conference at the Governor’s Mansion. Doing nothing will mean cutting state programs and increasing property taxes, and likely will lead to credit downgrades for the state, he said.
Wolf acknowledged it will be difficult to keep all the House Democrats on board for a vote to hike taxes. “I’m very concerned,” he said.
House Democratic spokesman Bill Patton said “we’re very hopeful” most Democrats will hold firm.
Southeastern Pennsylvania is potentially the most fertile ground to find Republican lawmakers who will break ranks. Wolf would need 18 GOP votes if all Democrats support his plan.
It’s “absolutely not” likely that many, if any, Republicans will defect, said Rep. Russ Diamond, R-Lebanon. Though it was not an “explicit offer,” Diamond got a call from a Wolf administration official dangling the possibility of transportation and economic development grants for his district if he votes with Wolf. Diamond said he wasn’t interested.
Sheridan said he wasn’t aware of any such offers.
With state funding drying up, many school districts and human service providers are borrowing money.
“We are willing to work with (Wolf),” House GOP spokesman Steve Miskin said. “We have been willing to work with him. We are attempting to work with him … on a reality-based budget.”
Wolf told reporters he’s “looking forward to trying to get 102 votes” in the House on Wednesday. “This is a once-in-a-generation vote. I’m grateful for the opportunity to test this.”
But, said J. Wesley Leckrone, a political science professor at Widener University in Chester, “I don’t see any way it’s going to pass. But maybe it starts off a new discussion.” Without linking the tax plan to specific spending plans, the odds are steeper for passage, Leckrone said.
House and Senate GOP leaders have said they won’t lobby against Wolf’s plan and will give him a fair shot to pass it.
If it is substantially different from Wolf’s Sept. 11 plan, “it will be reassessed,” Miskin said.
House Majority Leader Dave Reed, R-Indiana County, said he does not believe the votes are there for a broad-based tax hike — except if they are used on a “dollar for dollar” trade-off to cut property taxes.
“To get the funds (Wolf) would like, he would likely have to offer something that Republicans would jump at — like liquor store privatization,” said Kyle Kopko, a political science professor at Elizabethtown College. “But even that may not be enough.”
Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].