The recently unveiled 2015-16 budget proposal by Gov. Tom Wolf represents the largest tax increase proposal in the history of Pennsylvania. It would be a $4.7 billion tax hike, which is a 16 percent increase over this year’s budget, for a total of $33.8 billion in spending. I strongly oppose this unprecedented and massive tax-and-spend plan that would hurt so many working families struggling to pay their bills and provide for their families.
Within his budget plan the governor is proposing to increase the Personal Income Tax by 21 percent, or $2.4 billion to be paid by families and employers. Wolf also proposes to increase and expand the Sales and Use Tax paid by everyone by 10 percent, or an increase of $1.6 billion, along with various taxes on tobacco and cigarettes that would result in a combined tax increase of $1,000 annually coming out of the pockets of the average Pennsylvania family earning $52,000 per year. The Sales and Use Tax, under his plan, would now include things like baby diapers, child day care, textbooks, doctor’s visits, attorney’s fees, long-term care, wheelchairs, coffins and many other items and services.
Wolf also wants to implement one of the highest severance taxes in the nation on natural gas at the well head. His proposal calls for a 5 percent new tax, but with an additional 4.7 cent per Mcf surcharge. At current prices, the surcharge pushes the effective tax rate to somewhere between 7 percent and 8.4 percent. This effective rate may rise even higher depending on how natural gas prices change in coming months and years. This is in addition to the $2.1 billion in shale-related taxes, $1.2 billion in royalties to property owners, $1 billion in road and infrastructure improvements, and over $630 million in impact fees to gas-producing counties and municipalities the industry is already paying through the Act 13 impact fee. This is an industry that has provided many families with good jobs and boosted the local economy throughout the Northern Tier. I think we need to be careful that we do not drive this economic giant and job creator out of the state due to such heavy financial burdens.
Of course, as is the case each year, the governor’s budget address is only the first of many steps in the budget process. During the month of March, the General Assembly will be holding budget hearings with each of the state agencies to determine spending priorities and help us to flush out a final budget plan that will set Pennsylvania up for long-range success and does not place undue burdens on taxpayers.
More information on the governor’s budget proposal is available at www.pahousegop.com
Representative Matthew Baker
Pennsylvania House of Representatives
Media Contact: Tricia Lehman