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Wolf: Wealthy should pay more to cut school taxes

The Associated Press
PennsylvaniaGovernorWolfJPEG00ae6
Pennsylvania Democratic gubernatorial candidate Tom Wolf speaks during an interview with The Associated Press Friday, July 25, 2014, in Philadelphia. Wolf would make a centerpiece of his first budget proposal an increase in income taxes on Pennsylvania's higher-earners to help expand the state's share of public education funding in exchange for a dollar-for-dollar reduction in local property taxes levied by school boards. (AP Photo)

PHILADELPHIA — Democratic gubernatorial candidate Tom Wolf would make a centerpiece of his first budget proposal an increase in income taxes on Pennsylvania’s higher-earners to help expand the state’s share of public education funding in exchange for a dollar-for-dollar reduction in local property taxes levied by school boards.

In an interview with a panel of Associated Press reporters and editors Friday afternoon, Wolf sought to cast the exchange — several billion dollars a year — as a redistribution of burdens within Pennsylvania’s nearly $30 billion state public school system. Wolf’s goal would be to raise the state’s share of public school costs to 50 percent; it currently pays about one-third, while property taxes shoulder more than 40 percent.

The reliance on local taxes to finance Pennsylvania’s public schools has almost reached a crisis point, Wolf said.

Shift from property taxes

“There is a real passion for property tax relief,” Wolf said. “We have gone well beyond what I think the local property taxpayer should pay to support public education, and so we need to reduce that, and that means that the state should take a bigger share of responsibility.”

Wolf, who is challenging Republican Gov. Tom Corbett in the Nov. 4 election, said any increase in state funding for schools would hinge on a reciprocal reduction in property taxes that he would make mandatory.

Wolf’s plan to reshuffle school funding would accompany his proposed overhaul of the 43-year-old income tax. It would be his intent, he said, to use this new income tax structure targeting higher-earners as an essential way to shift a portion of public school funding away from property taxes.

His plan would shift more of the financial burden onto wealthy taxpayers, reduce taxes for the middle class — a category he says includes households with taxable incomes of roughly $70,000 to $90,000 — and exclude more lower-income households from the tax.

He would do it by combining a “universal exemption” — an income amount below which all households are not taxed — with a flat percentage tax to incomes above that. The new flat percentage tax would be higher than the 3.07 percent at which it is currently set.

“I’m looking at it from the point of view of fairness. I think people like me should pay more. I think people who are starting out, building a business, starting a family, should pay less,” Wolf said.

Wolf, a wealthy businessman from York County, sank $10 million of his own money into a TV-heavy Democratic Party primary campaign that helped him win a four-way race in the May 20 election.

Other revenue

Wolf has proposed other ways to collect more money for public school funding and the state treasury, including by imposing higher taxes on the booming natural gas industry.

Property tax relief remains an elusive goal in Pennsylvania, much discussed in the Capitol for more than a decade but so far only delivered in doses that are quickly swallowed by the schools’ growing costs.

Asked how he expects to sell his education-funding proposal to the Republican-controlled Legislature, Wolf said support is already strong for pending bills to replace property taxes altogether by increasing state tax rates on income and sales.

“These are conservatives in the Legislature,” he said. “They’re coming up with some pretty huge increases in other state taxes, and that seems to be very popular among a big section of the population.”

Wolf, however, does not support an increase in sales taxes, saying he views it as falling too heavily on lower-income consumers.

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