Lawmakers in Pennsylvania are faced with some tough decisions ahead, and residents of the Keystone State will be affected one way or another. Republicans and Democrats have a difference of opinion on how to supplement a huge budget deficit. One side favors expanding gambling with slot machines in bars and taverns, while the other would prefer to raise taxes.
We can be fairly certain that all Pennsylvanians would strongly opposed a tax hike, whether it’s applied to sales tax, personal tax, or both. That’s what Democratic Governor Tom Wolf’s administration has proposed in hopes of raising additional funds to cover what is expected to be a minimum $1.8 billion budget deficit.
Republicans harshly opposed that plan, though. Instead, they would like to see slot machines installed at bars and taverns, which would generate additional revenue via licensing fees and gaming taxes. They also recommended cutting spending by privatizing liquor stores and reforming the state’s pension plan.
Perhaps the most difficult hurdle of all will be finalizing a 2016-17 budget plan before the June 30 deadline.
Another Year, Another Long Road Ahead
Last year’s budget took an extra 9 months to complete as Gov. Wolf and lawmakers could not come to an agreement on how to manage the deficit and increase education funds. This year’s issues are quite similar, and it’s difficult to tell whether either side is willing to compromise.
Democratic State Rep. Flo Fabrizzio [D-Erie], referring to the viewpoint of PA Republicans, said, “At least from the majority party side, there seems to be no appetite for broad-based tax increases.”
However, Rep. Fabrizio also said that, despite discussions still being in the preliminary stages, “there seems to be a prevailing attitude that we all want to get this done by the June 30 deadline.”
State Rep. Brad Roae [R-Crawford County], believes a tax hike is out of the question. “There’s not going to be a sales tax increase or a personal tax increase or anything like that,” said Roae, who staunchly opposed many of Gov. Wolf’s primary submissions.
Rep. Roae said legislators are strongly considering other proposals on the table, including the option to install slot machines in bars and taverns, as well as Wolf’s suggestion to increase the tax on cigarette sales by as much as $1 per pack.
There’s also ongoing debate over whether PA should regulate online gambling, offering high-cost licenses to the state’s existing land-based casinos.
Natural Gas Industry Tax No Longer Moot Issue?
Wolf’s administration tabled a motion to impose a 6.5% severance tax on the natural gas industry. The proposal estimated the new tax would raise $217.8 million in the upcoming fiscal year for Pennsylvania.
A similar natural gas industry tax was considered last year, but harvested little support. This year, Rep. Roae and State Sen. Sean Wiley [D-Millcreek Township], think it could garner a lot more interest from legislators.
So long as there is a steady production of natural gas in the Keystone State, Rep. Roae said he and his fellow Republicans would be open to the idea.
As of right now, the only issue that seems all-but guaranteed to be included in the 2016-17 is pension reform. And while many Pennsylvanians may look abjectly on the idea of putting slots in bars or regulating online gambling, I’ve little doubt the majority of those would change their minds to prevent an increase in sales/personal taxes.