By Kate Giammarise and Karen Langley / Post-Gazette Harrisburg Bureau
HARRISBURG — Gov. Tom Wolf and Republican leaders acknowledged Monday that they have not reached agreement on how the state should lower local property taxes under a framework intended to end Pennsylvania’s five-monthlong budget impasse.
They differed on another point, as well: Whether the property tax disagreement has derailed the entirety of the budget talks.
Speaking Monday at a luncheon near the Capitol, Mr. Wolf said the framework appears to be in “deep peril.” He cited votes Republicans prepared or held on proposals that conflict with the framework, and said GOP leaders had told him they could not muster the votes “to deliver on property tax relief.”
“In other words, the framework was not going to become a budget,” Mr. Wolf said. “I deeply regret this. We had within our grasp a budget framework that would have been transformational for Pennsylvania.”
Not long after the governor’s remarks, Senate Majority Leader Jake Corman, R-Centre, told reporters that he does not have the votes to distribute property-tax relief according to a formula supported by Mr. Wolf, which Mr. Corman said would deliver “a disproportionate share of the property tax money to Philadelphia.”
Under the framework, money for the reductions would come from raising the statewide sales tax from 6 percent to 7.25 percent. (Allegheny County has an additional 1 percent sales tax.)
With the budget already long past overdue, Mr. Corman said he concluded that the issue of property-tax reductions should be set aside. He said that when he told Mr. Wolf this, the governor did not express disagreement.
“I think we’re close,” Mr. Corman said. “But that’s me. If he thinks it’s in peril, I can’t speak to that. But we’re trying our best.”
On Monday night, the Senate took up a proposal designed to eliminate school district property taxes by raising the sales and personal income taxes, a plan Mr. Wolf cited as one that he opposed. Members tied 24-24 on a preliminary vote on the proposal, and Lt. Gov. Mike Stack broke the tie by voting no.
Steve Miskin, a spokesman for House Republicans, said the tone of Mr. Wolf’s remarks at the lunchtime event was “hugely perplexing.”
“We still have meetings scheduled. We are meeting, and we are working towards finalizing a budget,” he said, that would be “within the general framework that has been discussed.”
Monday marked the 146th consecutive day Pennsylvania has gone without a budget. Mr. Wolf said two weeks ago that he hoped to have a budget in place by Thanksgiving, a goal that without agreement by now would be virtually impossible.
The framework Mr. Wolf and legislative leaders announced would have boosted funding for the main K-12 education line by $350 million, provided relief from local property taxes, increased the state sales tax rate while keeping the personal income tax rate steady, set aside Mr. Wolf’s proposal for a severance tax on natural gas drilling and included some sort of reforms of the statewide pension and liquor systems, two areas of concern to Republicans.
In September, Mr. Wolf vetoed a short-term budget bill, and on Monday he said he continues to want a full-year budget.
The lack of an enacted state budget has forced school districts to borrow millions of dollars, and human service agencies have laid off staff and cut services.
“We’ve been turned into collections. We’ve had our phones shut off. ... This will have far-reaching implications for our agency and for our community,” said Terri Hamrick, who runs a domestic violence shelter in Adams County, speaking about the budget impasse.
The property-tax proposal that narrowly failed in the Senate on Monday was designed to eliminate school district property taxes by increasing the state sales tax from 6 percent to 7 percent and the personal income tax from 3.07 percent to 4.95 percent, while also applying the sales tax to purchases that currently are not taxed.
“Only elimination cures one overriding fear, and that is that property taxes will just simply rise again,” Sen. Lloyd Smucker, R-Lancaster, said in support of the bill.
Sen. Pat Vance, R-Cumberland, countered of the proposal: “Many people seem to believe that their property taxes will disappear entirely, go away forever — not true.”
Karen Langley: email@example.com, 717-787-2141 or on Twitter @karen_langley. Kate Giammarise: firstname.lastname@example.org, 717-787-4254 or on Twitter @KateGiammarise.
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