Aug. 26, 2015
By Rep. Thomas Killion (R-Delaware)
Gov. Tom Wolf has been traveling across the state in an effort to build support for his proposed state budget. But what is sorely lacking at the governor’s public appearances and speeches is straight talk about his proposed tax increases.
When making the case for his budget, the governor only talks about his desire to impose a severance tax on the extraction of natural gas in Pennsylvania. To hear the governor talk, one would think that the budget impasse between the governor and the Republican-controlled legislature is all about the severance tax issue.
Most people would probably be surprised to learn that the shale gas extraction tax would account for only 3 percent of the governor’s proposed tax increases. Much more concerning to Republicans in the legislature – and many taxpayers – are the governor’s proposals to expand and increase the state sales tax and hike the Personal Income Tax. The reality is that the governor’s tax proposal would raise $4.6 billion in new revenue. While 3 percent would come from a severance tax, the other 97 percent would come from hard-working Pennsylvania families in the form of higher sales and income taxes.
Wolf’s efforts to claim that the extraction tax is the impediment to a budget deal is a clever political tactic, but it holds little basis in reality. The governor’s proposal is to hike the sales tax from 6 percent to 6.6 percent -- and expand it to cover hundreds of items currently not subject to the sales tax. With the increase and expansion, it will be a 40 percent increase in sales tax revenue. By its very nature, the Wolf sales tax increase and expansion plan is regressive because it would disproportionately hurt middle-and lower-income families.
Under the Wolf sales tax expansion plan, families would pay an additional 6.6 percent tax on hundreds of items and services not presently subject to the sales tax. Many families and young people are already struggling with the affordability of college. But Wolf’s proposal would add to that burden, hiking the cost of college fees, textbooks and meal plans by 6.6 percent. The cost of caring for children would also increase with items such as day care and diapers being subjected to the sales tax. Wolf is also seeking to impose the sales tax on other items, such as cable television service, home health care, nursing home care, transportation, and personal hygiene items like toothpaste, shampoo and soap.
The governor is also being misleading about how funds from his proposed shale severance tax would be used. Contrary to his rhetoric, the revenue would not be used exclusively for education. What the governor is not saying is that more than one-third of the severance tax - approximately $55 million – would be used to cover annual debt service on a $675 million bond on subsidies for wind and solar projects.
The governor’s budget proposal also pits taxpayers against one another, with residents of certain regions of the state and school districts coming out as winners or losers. Wolf’s plan is extremely unfair to the residents of the four school districts I represent.
Under the Wolf plan, residents of my district would pay an additional $132 million in increased personal income and sales taxes. In return, residents of my district would receive $38 million in temporary property tax relief and 4 million in additional education funding, divided among our four school districts. This would result in more than $94 million of our hard-earned money staying in Harrisburg each year.
This is simply unfair to the residents of Rose Tree Media, Marple Newtown, Garnet Valley and West Chester school districts. Put another way, residents would pay more than three times in additional personal and sales taxes than they would see in property tax relief. That is a huge tax hike, cleverly masquerading under the pretense of property tax reform.
I am willing to work with the administration to develop a budget that funds education and meets the needs of Pennsylvania, but those negotiations require the governor to be honest with our citizens about his proposal and what it will mean for our communities. Only then can we have an open and honest public discussion about the best way to move Pennsylvania forward for all citizens.
Representative Thomas Killion
168th District
Pennsylvania House of Representatives
Media Contact: Donna Pinkham
717.260.6452
dpinkham@pahousegop.com
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