Wolf, GOP Eye Major Sales Tax Increase To End Budget Impasse

The loss of that money for school property tax cuts would be replaced by about $2 billion expected from a state sales tax increase to 7.25 percent, up from the current 6 percent.

The centerpiece is clearly the property tax plan, through which Wolf and legislative leaders would look to roughly triple the amount of reductions that are now funded through taxes on the casinos’ winnings; and help fix a growing gap between recurring expenses and income.

Schools would get hundreds of millions of new dollars.

“There’s a lot of details that will still have to be finalized, but certainly, the moving the sales tax from 6 to 7-and-a-quarter (percent) has been part of the discussion”, Reed said.

House Democratic Whip Mike Hanna said Monday that leaders of the Legislature’s Republican majorities remain unwilling to support a Marcellus Shale tax.

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. On Friday, House Majority Leader Dave Reed wrote in a note to rank-and-file Republicans that there’s progress toward a framework that could lead to a final budget agreement, possibly by Thanksgiving.

That shift of the slots money, in turn, would free up dollars in the state’s general fund that could be used for increases in state aid to public schools, public universities and other needs.

Ironing out those details and passing legislation could require several more weeks. “It would be the largest single increase in education funding in the history of Pennsylvania”. The rate would rise to 8.25 percent in Allegheny County, where it is now 7 percent, and to 9.25 percent in Philadelphia, where it is now 8 percent. The plan would save the state $12.5 billion in the coming decades, Senate officials said.

There is also no agreement yet on Republican wishes for tighter limits – and maybe even voter-driven controls – on any future school tax increases.

In a statement released Monday evening, Governor Tom Wolf announced: “I’ve secured a commitment from Republican leaders for a historic increase in education funding”.