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Details of potential deal to break state's budget stalemate
Details are emerging from negotiations to break Pennsylvania's budget stalemate, now in its fifth month. Here's a look at some of the preliminary agreements and unresolved issues:
Spending would rise to about $30.75 billion, up about 6 percent, or $1.7 billion, from last year's approved budget of just above $29 billion.
About $500 million from slot-machine gambling receipts would be put into a restricted account to pay for public school employee pension obligations. That money currently is passed along by school districts to homeowners as property tax cuts.
Public schools would see $350 million in new money for instruction, operations and special education, an increase of about 6 percent to $6.1 billion. There is no agreement on how to distribute the new aid to school districts.
The state sales tax rate would rise from 6 percent to 7.25 percent, or 21 percent, to generate $2 billion in new dollars to offset an expansion of local school property tax cuts. The rate would rise to 8.25 percent in Allegheny County, where it is currently 7 percent, and to 9.25 percent in Philadelphia, where it is currently 8 percent.
There is no agreement on how property taxes in each school district would be affected.
The deal would not include a severance tax on Marcellus Shale natural gas production.
Tax increases on cigarettes and on banks are under discussion.
Newly hired school and state government employees would get a diminished traditional pension benefit, plus a 401(k)-style plan with a 2 percent contribution. The plan would save the state $12.5 billion in the coming decades, officials say.
WINE AND LIQUOR SALES
Changes to the state-controlled system of wine and liquor sales remain under discussion.
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