Gov. Wolf has proposed creating new revenue sources to fund his proposed spending increases.
The majority Republican leader- ship in the legislature has made it clear that it prefers spending cuts to revenue increases, despite the fact that failing to raise revenues during the previous
administration left Pennsylvania with a $2 billion structural deficit. Revenue and savings proposals include:
• Imposing a new 5% tax on natural gas extraction, equal to the taxes in neighboring states.
• Reducing base net corporate income tax from 9.99% to 5.99%, but closing loopholes that allowed many large, out-of-state corporations to pay little or no taxes in Pennsylvania.
• Instituting “combined reporting” of corporate taxes.
• Fixing a glitch in the state’s bank shares tax rate that cost the state millions in lost revenue.
• Increasing state sales tax from 6% to 6.6%.
• Raising the state’s personal income tax rate from 3.07% to 3.77%.
• Increasing tobacco taxes on cigarettes, little cigars and smokeless tobacco.
• Modernizing wine and spirit store operations (hours, locations, shipping, competitive pricing) and using the proceeds used to pay down the state’s pension debt.