Wolf’s call: His unrealistic budget will undermine cooperation
March 4, 2015 12:00 AM
Matt Rourke/Associated Press
Gov. Tom Wolf arrives to delivers his budget address Tuesday in Harrisburg as House Speaker Mike Turzai, R-Marshall, left, and Lt. Gov. Michael Stack look on.
By the Editorial Board
Gov. Tom Wolf started his first budget address with an appeal to bipartisanship but then launched a campaign for such a dramatic revamping of state taxes that he invited the label of tax-and-spend Democrat.
That’s unfortunate, because Pennsylvania’s financial predicament — a $2 billion deficit — means leaders on both sides of the political aisle might have been ready to give consideration to meaningful changes that would help fill that hole.
Instead, Mr. Wolf swung for the fences and his budget proposal was a miss. Under any circumstance, it would be ambitious for a Democratic governor to seek a 23 percent increase in the state’s personal income tax rate, a 10 percent increase in the sales tax and the introduction of an extraction tax on Marcellus Shale drillers all at once. To make that pitch to a Legislature firmly controlled by the opposing Republican Party was utter folly.
The voters who elected Mr. Wolf had tired of the state’s funding cuts to education and its fiscal failures under Tom Corbett, but those same citizens elected a House and Senate that are leery of tax increases and in favor of meaningful reform of public employee pensions. That should have tempered Mr. Wolf’s first approach to the 2015-16 budget.
The tax-hike proposals drowned out some of the reasonable features of Mr. Wolf’s budget — requiring state universities to freeze tuition if they want more state aid, closing the “Delaware loophole” that lets some companies elude Pennsylvania taxes, raising the tax on cigarettes and creating a tax credit for manufacturers. Republicans already agree with him that the capital stock and franchise tax should be phased out and they likely would favor his plan to halve the corporate net income tax from 9.9 percent to 4.9 percent.
Given the need to raise more revenue, he might have found some members receptive to a pitch for a reasonable 5 percent extraction tax on natural gas drilling, even if lawmakers would decide not to go along with the additional 4.7 cents tax per thousand feet extracted that the governor also proposed.
The most notable cut is the governor’s proposal to lighten the property tax burden that funds education. He said his plan means the average homeowner would pay 50 percent, or $1,000 a year, less, and that many senior citizens would see their property tax bill erased. As welcome as all that might be, the flip side is significant hikes in income and sales taxes. That’s not a bargain this Legislature is likely to strike.
Mr. Wolf’s proposed increases and cuts are so closely intertwined that they suggest a “take it or leave it” stance that is self-defeating for the new governor. A more realistic approach could have led to meaningful negotiations and compromise.
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