[PA]Gov. Tom Wolf to propose tax increase to benefit public schools, give tax breaks to some families

Pennlive ^ | 2 February A.D. 2021 | Jan Murphy

[lightman]

Gov. Tom Wolf’s 2021-22 budget proposal contains the largest increase in education spending Pennsylvania has ever seen along with a sizable increase in the state’s personal income tax rate.

While the governor is proposing to raise the income tax for the first time in nearly two decades, some of the new money would be directed to provide tax relief for lower income families and some tax-shifting at the local level.

According to sources, the governor will be proposing hiking the 3.07% personal income tax rate rise to 4.49%, starting July 1. That would be the first time it has increased since 2003. An increase of that size in the personal income tax would raise more than $3 billion annually.

There are nine states with flat tax rates like Pennsylvania currently range from 3.07% in Pennsylvania to 5.25% in North Carolina. With this proposed increase, it would push Pennsylvania into the seventh spot out of nine with only Indiana at 3.23% and Michigan at 4.25% being lower.

The budget proposal seeks to address the inequities created by the state’s flat personal income tax rate by expanding the tax forgiveness credit, according to an administration official. Filers with incomes at or below these thresholds – $15,000 for single filers; $30,000 for married filers; and $10,000 allowance for each dependent – will receive total 100 personal income tax forgiveness. The percentage of tax forgiveness declines by 1 percentage point for each $500 above the threshold for 100 percent forgiveness.

So families with two children making less than $84,000 will receive a tax cut while a family of four making $50,000 will have their taxes eliminated.

It appears the governor’s budget proposal also attempts to boost overall state spending to $37.7 billion which is what the state’s Independent Fiscal Office indicated is necessary to maintain spending at current levels. This year’s general fund budget totals $33.1 billion in state spending with $3.4 billion in federal stimulus funding to help soften the blow from the pandemic recession.

More than $1.3 billion raised from a higher income tax would go to basic education funding, boosting that total to about $8.1 billion. Most of that would go through the 5-year-old funding formula designed to iron out inequities in how Pennsylvania funds the poorest public schools as well as to allow for some tax-shifting off local revenue sources, according to sources.

Wolf is proposing to increase funding for special education by $200 million, to a total $1.4 billion, and the total increase in funding for public schools could approach $2 billion, according to the Associated Press.

The governor is proposing to reduce the 9.99% corporate net income tax and impose a severance tax on natural gas drillers. Pennsylvania is the only major gas-producing state that doesn’t have a severance tax on the product at present; instead, the state imposes an impact fee that is assessed on each drill site. According to the state’s Independent Fiscal Office, the 2020 impact fees equaled an effective tax rate of 3.3%. (West Virginia’s rate, by comparison, is 5%.)

Wolf’s budget proposal also is expected to revive Nelly Bly scholarship program designed to help low- and middle-income full-time students who attend a Pennsylvania State System of Higher Education university. It would be funded by the Race Horse Development Trust Fund, which receives money from slots gaming in Pennsylvania casinos.

He also once again wants to impose a fee on municipalities that rely on the state police for police coverage, and raise the minimum wage to $12 an hour and ratchet up by 50 cents a year until it reached $15.

The Democratic governor will need approval from the Republican-controlled General Assembly to approve his spending plan and his proposals to raise the state income tax and increase the minimum wage.

[lightman]

Deep, deep blue Democrat.

During his first campaign it was said,

"If you like Øbama you'll LOVE Tom Wolf"

[Eagles6]

If we factor out the vote fraud it's red.

We need to put heavy pressure on our Republican controlled legislature to investigate this election, including signature verification of all mail in ballots.

[TakebackGOP]

If they get a Trump supporter, it will help the 2024 Election.

[Trump Girl Kit Cat]

How many in the MAJORITY of the Republican legislators in PA. did one damn thing about the state constitution voting laws being broken ONE that is how many ONE!! The Republican Party is USELESS and has been for decades!! If you want to continue to support them go right ahead BUT I have been working my heart out for these bastards for 45+ years and I am telling you our nation has continued to slide into the abyss BECAUSE republicans don’t give a shit AND NEVER WILL!!

[TakebackGOP]

I know, but that was after the Election.

[Trump Girl Kit Cat]

The state constitution laws were broken BEFORE the election ever happened the legislators DID NOTHING!!!

[Trump Girl Kit Cat]

I am in your boat NEVER voting again NEVER the republicans can get SCREWED!!!

[TakebackGOP]

I know, but the leaders will be primaried.

[Trump Girl Kit Cat]

For DECADES we have tried to primary these people it is IMPOSSIBLE they make sure primary candidates don’t stand a chance!! I have been at this for 45+ years and EVERY damn time we give republicans FULL CONTROL they betray us!! THAT IS FACT!!!

[TakebackGOP]

I agree with you, but I think that people out of state will contribute money to the challengers after the 2020 Election.

[Freee-dame]

You are assuming that a family has two parents. Sadly, that is no longer to be assumed.

[Varda]

A family is the husband and wife. Children are born into families. Traditionally even families where the husband or wife was deceased were still considered intact. Studies have confirmed that this is the case.
The modern interpretation (any group of people is a family) is the (so far) successful attempt to destroy the family. If everything is a family than nothing is.