Wolf Answers Critics of His Budget, Tax Plan

Concerns about tax increases on sales and income being sought by Gov. Tom Wolf in his sprawling budget plan must be balanced by consideration of the benefits, including cuts to school taxes, the Democratic governor said Wednesday.

Wolf spoke on WITF-FM's "Smart Talk" show as the House Appropriations Committee held its third day of hearings on Wolf's proposal amid withering criticism from Republicans in the GOP-controlled Legislature.

Among the questions posed to Wolf were concerns that it would raise income taxes on people who cannot afford it and hit the elderly by expanding the base of the state sales tax to include nursing home services and caskets. Wolf acknowledged those increases, but said people who pay those increases might save more money from his plan to cut school property taxes.

"I'd ask Pennsylvanians to look at this honestly, with a dispassionate eye, and say, `Am I going to be better off as a result of all these things? Is my life going to be better? Am I going to be paying less or more in taxes? Am I going to get more or less in the services that really make my life better? If my school's going to be better for my grandchildren or my children,'" Wolf said. "And I think they'll say at the end, 'Pennsylvania's going to be in a better place as a result of this.'"

Wolf's plan would pump billions into public schools in a bid to bring the state's share of public school costs up to 50 percent and help close the gap between what the poorest school districts and the wealthiest school districts spend to educate each child.

"I think if we're honest with ourselves, we have to say, 'we cannot afford to live with a school system that is underperforming and in which we underinvest,'" Wolf said.

Broadening the base of the sales tax is a trade-off, he said. He noted that a property-tax plan floated by the House Republican floor leader, Dave Reed of Indiana County, would increase the sales tax to 7 percent from 6 percent, but keep the exemptions intact. Wolf is seeking a smaller increase, to 6.6 percent.

Under Wolf's plan, the state income tax would rise from 3.07 percent to 3.7 percent, identical to Reed's plan. It is designed to deliver tax cuts to homeowners whose incomes are below $100,000, while those who earn more would pay more.

However, years of efforts by Republicans to achieve similar goals- increasing state taxes to cut school property taxes- have failed. Rather, lawmakers have been able to agree to make it more difficult for school boards to raise property taxes.

Wolf's overall plan would balance a recurring deficit in the state's operating budget, cut corporate taxes, create $426 million in rebates for lower-income renters and finance more than $4 billion in new aid to education programs and school districts to cut property taxes.

Including school employee pension costs, Wolf's budget would increase state spending on operations by 9 percent, to $31.6 billion, in the fiscal year beginning July 1.