Senator proposes 2-month sales tax holiday
Would suspend 6% sales tax in June and July
Citing soaring inflation and its crimping effect on consumers’ buying power, state Sen. Lisa Boscola wants to suspend Pennsylvania’s 6% sales tax for two months.
In a memo circulated to fellow lawmakers in Harrisburg — a preliminary step to filing a bill — the veteran Northampton County Democrat who is up for election this year, said she wants to bring about a two-month sales tax holiday in June and July.
“Everyone is hurting from the effects of inflation,” Boscola wrote in her memo. “It was reported that in January of 2022, the annual inflation rate in the US accelerated to 7.5%. This is the highest since February of 1982. The tax holiday is intended to help provide some temporary relief to everyone.”
Boscola said her proposal would reduce state revenue by about $2 billion, but that was only about half of two years of budget surpluses recently detailed by Gov. Tom Wolf.
Reactions to Boscola’s concept were mixed, with Democrats willing to take a look or even voice support, while Republicans raised questions and doubts.
Wolf, a Democrat, is open to looking at ways to support individuals and families and “the best way to support is to ensure they can afford necessities,” said Wolf spokesperson Beth Rementer.
She cited Wolf’s proposal to distribute $1.7 billion in federal coronavirus relief money, including direct payments of up to $2,000 for some households.
Rep. Kerry Benninghoff of Centre County, the Republican leader in the House, said Boscola’s proposal was probably tied to her being an election candidate this year.
Erica Wright, a spokesperson for Senate Republican Leader Kim Ward, said analysis of Boscola’s proposal would have to wait until a bill was filed, but Senate Republicans want to use strategic investments in people and businesses to help push the state beyond the pandemic.
Republican Sen. Mario Scavello of Monroe County said Boscola’s concept would not solve the main problem with inflation, which he identified as high gas prices. The way to lower them, Scavello said, was to pressure federal leaders to boost energy output.
The top Democrat in the Senate, Jay Costa of Allegheny County, reacted favorably to Boscola’s concept.
“Given strong revenues, Senator Costa does support a tax holiday to help further stimulate our economy,” spokesperson Brittany Crampsie said.
Nicole Reigleman, a spokesperson for Democratic House Leader Rep. Joanna McClinton of Philadelphia, said Boscola’s proposal was being reviewed but that “Pennsylvania’s surplus should be used to support Pennsylvanians, especially those who continue to feel the impacts of COVID-19.”
Democratic Rep. Anthony DeLuca of Allegheny County last week proposed a six-month pause on the state’s 58-cents-a-gallon gas tax.
“Pennsylvanians need relief from pain at the pump,” DeLuca wrote. “As of this writing, the average per gallon gas price in Pennsylvania is $3.71. These high gas prices are simply unaffordable for many Pennsylvanians.”
The average per gallon gas price in Pennsylvania was $3.74 as of Tuesday, according to AAA.
‘Sound financial footing’
Boscola said the state is on sound financial footing based on information given by Wolf in his recent budget address.
“We are going to run a $2 billion dollar-plus surplus in this budget — 202122 — and the governor projects a similar surplus next year,” Boscola said.
Since the state’s fiscal year ends on June 30, suspending the sales tax in June and July would divide the loss of revenue between two different fiscal years, Boscola said.
Among businesses the temporary tax cut would help, she said, would be restaurants, hotels and other places that struggled during the pandemic.
“The state doesn’t need the sales tax right now,” she said.
Wolf’s portrayal of a bright fiscal situation has been criticized by state Sen. Pat Browne, a Lehigh County Republican who is chairman of the Appropriations Committee.
Browne called Wolf’s numbers unrealistic.
Using more traditional numbers, he said, the state could see a negative balance of $13 billion by fiscal 2027, should Wolf’s budget plan become law.
A spokesperson for the House Republican caucus, Jason Gottesman, called the Wolf figures a phantom surplus that is being used by Democrats to hide the fact that their economic policies are causing substantial harm to Pennsylvania families.