All Pennsylvanians to pay more, GOP gleans from report on Wolf’s tax plan
HARRISBURG — Democratic Gov. Tom Wolf’s tax plan would hit all income classes and amount to a “huge tax grab,” said a leading Republican lawmaker.
But John Hanger, Wolf’s policy director, on Friday disputed the Independent Fiscal Office report’s main conclusions. Wolf’s plan “would benefit most Pennsylvania homeowners making up to $100,000 and renters up to $50,000,” Hanger said.
The report released this week makes a key observation when it says all groups would pay more — including a small net increase for the lowest income group, those making $25,000 or less annually, said House Appropriations Chairman Bill Adolph, R-Delaware County.
That “directly contradicts” claims by Wolf and testimony of top staffers at appropriations meetings, Adolph said.
“When taken as a whole, the governor’s proposed budget is a huge tax grab that increases state spending by 16 percent,” he said.
Wolf’s $30 billion-plus budget would cut property taxes but raise income and sales taxes. It would hike taxes on cigarettes and other tobacco products, and levy a severance tax on natural gas extraction.
The fiscal office report said people making $100,000 or more pay about two-thirds of Wolf’s higher taxes.
“The proposed tax changes make the tax system consistently more progressive,” the report stated. “In a progressive tax system, an individual’s average tax rate increases with the level of income.”
Items subject to the sales tax would expand to include such things as textbooks, caskets, day care, nursing homes and home care. Professional services, such as those of lawyers, accountants and veterinarians, would be taxed.
The net tax revenue calculated in the report is the amount people would pay after property tax breaks.
A key difference between the report and Wolf’s numbers is data used, the governor’s office said.
The Department of Revenue has “access to more sophisticated information on consumer spending habits” than the fiscal office, Wolf’s spokesman Jeffrey Sheridan said.
The “analysis of the governor’s plan concludes that the average Pennsylvania family of four that owns a home and makes $100,000 or less will receive a net tax cut,” Sheridan said.
The budget proposal fixes a $2.3 billion deficit “without gimmicks,” he said. The Independent Fiscal Office has projected a $1.5 billion deficit.
Wolf’s challenge is to push the plan through a Republican-controlled House and Senate. Many lawmakers seem taken aback by the scope of the tax increases.
The report makes it no easier for fiscally conservative Western Pennsylvania Democrats to give Wolf a vote on the budget.
“There are about 15 of us out front … very reluctant to support this,” said Rep. Nick Kotik of Coraopolis, head of an informal caucus of “Blue Dog Democrats.”
“I just think (Wolf) is taking on too much at one time,” Kotik said. “Given the makeup of the Legislature, I don’t know how he gets the votes. It’s going to be a long summer.”
By law, the budget is due by July 1.
“As more information like the unbiased IFO report comes out, the cracks in the governor’s proposal will continue to grow,” said Bill Stoll, a House Republican budget spokesman. “The data used by the Department of Revenue is the same data used by the IFO — the U.S. Census Bureau’s consumer expenditure survey.”
Even with $100,000 in annual income, “you may be talking about two $50,000 wage earners,” said Jennifer Kocher, a spokeswoman for Senate Republicans.
“It’s a tax (package) to increase spending,” Kocher said. The Wolf plan contains “a lot of tax, tax and tax and spend, spend and spend,” she added.
Most Republicans likely are set against Wolf’s plan, said J. Wesley Leckrone, a political science professor at Widener University in Chester.
A “relatively nonpartisan” group such as the state fiscal office primarily provides “sound bites” for the GOP, Leckrone said, but its analysis may influence moderate Republicans representing independent voters in suburban Philadelphia.
Christopher Borick, a political science professor at Muhlenberg College in Allentown, said reports such as this one often wind up on a shelf.
“Does it change the dynamics of what gets done eventually? That’s where I’m suspicious,” he said.
Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].