House rejects Wolf tax hikes
9 Democrats join GOP majority to vote down increases
HARRISBURG >> Gov. Tom Wolf’s hopes of ending Pennsylvania’s 99-day-old state budget impasse were dashed Wednesday when nine of his fellow Democrats joined all House Republicans to vote against his revised plan to raise billions in income and gas drilling taxes.
The House voted 127-73 against Wolf’s plan to increase the state’s personal income tax rate by a half percentage point and create a new extraction tax on Marcellus Shale natural gas production.
Democrats needed more than a dozen Republican votes, but were unable to keep on board some moderate members of their own caucus from western Pennsylvania. Wolf told reporters he was encouraged that somany Democrats voted yes.
“There is a bipartisan recognition that we have a big problemin Pennsylvania,” Wolf said.
Wolf had proposed the tax package on Tuesday, after Republican leaders who currently control both chambers of the Legislature offered him a f loor vote to demonstrate whether there was support for his approach.
“It is time to get about the business of getting this done,” said Majority Leader Dave Reed, R-Indiana, at the close of six hours of debate. “It’s time to take ideas and formulate them and put them together and build a better future.”
Wolf and his Democratic allies want new revenues to plug a billiondollar-plus structural deficit and to send more money to schools and for human services. But Republicans argued the income tax increase would be borne mostly by working families and warned the gas tax, on top of an existing impact fee, could damage the industry.
Wol f was “holding Pennsylvanians hostage to his unreasonable demand to strip away more of their wealth,” said Rep. Daryl Metcalfe, RButler. “This is no more compromise than a thug on the street telling you at gunpoint: ‘Give me the money in your pockets.’”
The amendment’s defeat was just the most recent in a series of partisan votes and Wolf vetoes as the state’s politically divided policymakers
“I’ve talkedwith numerous local residents, and they have overwhelmingly toldme, ‘Don’t raise our taxes.’” — state Rep. TomQuigley, R-146th District
have struggled to find common ground on a spending plan for the fiscal year that began July 1. Illinois is the only other state without a budget in place.
The governor’s proposal would have increased the Personal Income Tax (PIT) by 16 percent (from 3.07 percent to 3.57 percent) while providing minimal property tax relief for less than 2 percent of the population in two years.
“The property tax relief included in this proposal was window dressing,” said state Rep. Tom Quigley, R-146th Dist. “With no cap or elimination of property taxes, and no cost controls on items like pensions, any ‘relief ’ would be eaten up as quickly as it appeared.” Quigley also noted that in his interactions across the 146th District as another part of why he voted against this proposal.
“I’ve talked with numerous local residents, and they have overwhelmingly told me, ‘Don’t raise our taxes,” Quigley noted. “The people of my district do not want a 16-percent income tax increase, especially when it comes with no other real relief.”
Democratic lawmakers said the only way for the state to dig out of its current fiscal hole is to raise taxes.
“The budget deficit is real, it is massive,” said Rep. Joe Markosek of Allegheny County, the ranking Democrat on the Appropriations Committee. “Pennsylvania is in a fiscal mess, and if we don’t raise more revenue, if we continue to kick the can down the road, the resulting cuts will make the previous administration’s cuts seem like child’s play.”
Rep. Seth Grove, RYork, said lower-income residents would see natural gas become more costly, while working families would be hit with a 16 percent income tax hike.
“Let ’s rol l up our sleeves, find ways, smart ways to balance our budget without putting the burden on middle class and low-income Pennsylvanians,” Grove said.
Some lawmakers argued that public pension cuts should be part of the plan, and after the vote, Reed said a next step will be to work on savings in the pension systems, selling the state-owned liquor stores and expanding gambling. He did not rule out a gas drilling tax but said it would not be at the level Wolf wanted.
Rep. Gene DiGirolamo, a moderate Republican from Bucks County, urged his colleagues to cooperate with one another.
“If you’re the governor, if you’re a state senator, people elect us to work together to get things done and to solve problems,” he said. “And they expect us to solve problems and they expect us to get this budget done.”
Wolf called the vote a “tough political act” that could speed up the process.
“I think the Democrats showed their stuff today,” Wolf said. “I was really proud of them.”
Wolf’s goal had been to raise $1.4 billion for the current fiscal year and $2.4 billion next year. The approach that was defeated on Wednesday was considerably less costly than the budget Wolf outlined in March, and did not include a previous proposal to increase the sales tax and apply it to more items.