Few state budget details emerge in York, hurdles remain
As senior state lawmakers and Democratic Gov. Tom Wolf continue to negotiate a state budget, few details have emerged.
Pennsylvanians could expect to see their school property taxes reduced by an average of 35 percent, said Rep. Seth Grove, R-Dover Township, adding the relief would be through the state homestead and farmstead program that's open to owner-occupied homes and farms but excludes businesses.
There is no agreement on how property taxes in each school district would be affected, but the reduction would come by shifting the property tax burden to consumers through a higher sales tax.
Nothing is set in stone, and that average reduction could change as negotiations continue, Grove said.
Varying figures: If all properties, not just ones enrolled in the homestead/farmstead program, are included in the relief plan, the average reduction would be about 15 percent.
Jeff Sheridan, spokesman for the first-term governor, said the exact amount of relief, as well as other aspects of the budget, are still a work in progress.
"The distribution for property tax relief has not been worked out yet," he said.
Rep. Stan Saylor, R-Windsor Township, said he is also waiting to see details of the potential deal.
"Everybody's talking generality, not specifically," he said. "I'm still waiting to see what it amounts to."
To increase school property tax relief, the state sales tax rate would rise from 6 percent to 7.25 percent to generate $1.4 billion in new tax relief dollars. Schools also would see a record increase of $350 million, or about 6 percent, in state funding.
Total state spending under the proposed deal would rise to about $30.75 billion, up about 6 percent, or $1.7 billion, from last year's approved budget of just over $29 billion.
Hurdles: Though lawmakers and the governor's office say they are close to breaching the impasse, numerous hurdles remain.
Lawmakers from Philadelphia and the Pittsburgh area will join their colleagues to vote on increasing sales taxes to 9.25 and 8.25, respectively.
In Allegheny County, which includes Pittsburgh, the current rate is 7 percent. The current rate in Philadelphia is 8 percent. According to the Washington, D.C.-based Tax Foundation, there are local sales taxes in at least 12 states that exceed 9.25 percent.
Sen. Daylin Leach, D-Montgomery, said the budget deal does more harm than good. It takes a pass on a tax that Pennsylvanians wouldn't even pay — on Marcellus Shale production — while increasing the most regressive tax, the sales tax, largely in order to lower a less regressive school property tax, Leach said.
"We have the highest rate of income (inequality) in 100 years in this country, and making the tax structure more regressive makes that worse, not better," Leach said.
Democrats also will be hit with voting on two things they have long opposed — privatizing the state-controlled liquor stores to some extent and pension reform.
Reform: For years Republicans have argued for pension reform and liquor privatization but got nowhere despite holding a large majority the past few years and, at one point, having an ally in the governor's office in the form of former Republican Gov. Tom Corbett.
The GOP achieved some measure of success when in June they sent to Wolf's desk a bill to reform the state pension system and privatize the liquor stores. However, Wolf vetoed the measure, along with the Republican-crafted budget.
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. Changes to the state-controlled system of wine and liquor sales remain under discussion.
On pace: Despite the numerous details that still need to be sorted out, lawmakers remain hopeful they'll have a budget signed into law by the end of the month.
"I think we're still on pace for Thanksgiving," Saylor said.
Lawmakers are expected to vote on the spending package no later than Tuesday, Nov. 24 — two days before Thanksgiving — if they want to be home with their families for the holiday.
The General Assembly is scheduled to return to session a few days in December, according to its calender.
The Associated Press contributed to this report.
— Reach Greg Gross at email@example.com.