HARRISBURG, Pa. (AP) — The Associated Press is reporting…Lawmakers in Harrisburg kicked off budget hearings Tuesday as the Pennsylvania state government faces a multibillion-dollar revenue gap — a hangover from the ongoing coronavirus pandemic — and Gov. Tom Wolf’s proposal to raise the state income tax takes center stage. At the first House Appropriations Committee hearing, Democrats defended Wolf’s proposal, which is structured to shift the burden to higher earners and cut taxes for lower-income workers in a state with one of the most regressive tax structures.
AP reports…In addition, they said federal aid, if it comes, will not fix the state’s long-term deficit while Wolf’s proposal would also fairly fund public schools and open the door to school property tax cuts in some districts. Republicans, who control the Legislature, questioned whether Wolf’s income tax proposal — designed to lower taxes on lower-income households and raise them on higher-income households — is constitutional under case law that interprets the state constitution to require a flat income tax rate, rather than a graduated rate. One Republican, Rep. Natalie Mihalek of Allegheny County, suggested it was time to look at raising the tax-forgiveness exemption for the first time in nearly 20 years, a key element of Wolf’s income tax plan.
AP: But many other Republicans signaled opposition to raising the tax rate, warning that it will hurt people still hurting from the pandemic. One, Rep. Jonathan Fritz, R-Wayne, said that some people who qualify for tax forgiveness wouldn’t actually file the form necessary to receive the refund and would get hit with the increase anyway. Others said Wolf’s proposal won’t do anything to cut school property taxes or help the poor. “I think that it’s time to change the approach from higher taxes to actually getting out there and doing something that does help those who are poor who have children who are living below the poverty line, and there are lot of things we can do, but a tax increase isn’t one of them,”
House Appropriations Committee Chairman Stan Saylor, R-York, told Wolf’s revenue secretary, Daniel Hassell. Under the plan for the fiscal year beginning July 1, Wolf, a Democrat, is asking for what his administration calls a $4 billion, full-year income tax increase, or about 25% more. Some of the money, $1.3 billion, would provide a big boost in aid to public schools, or about 20%. The rest would help fill the deficit, estimated at $2.5 billion by the Independent Fiscal Office, a legislative agency.