HARRISBURG—Governor Tom Wolf today unveiled his proposed $40.2 billion General Fund Budget for Fiscal Year 2021-22, which includes a massive increase in state spending, a substantial personal income tax rate hike, imposition of Marcellus Shale extraction tax, and elimination of funding for broadband expansion as well as vital agricultural and health programs and services.
The Governor’s proposed FY 2021-22 Budget includes a $3.1 billion (8.2 percent) increase in state spending from the current fiscal year, according to Senator John DiSanto (Dauphin/Perry).
The Governor wants to increase the state personal income tax (PIT) rate from 3.07 percent to 4.49 percent (a 46.3 percent hike) as of July 1 to raise $3 billion annually. About one-third of all Pennsylvanians would see their state tax burden increase under the Governor’s proposed PIT rate hike.
Upwards of one million PA small businesses will have their tax rates increased by 46.3 percent under the Governor’s proposal, since sole proprietors and pass-through businesses like S corporations and partnerships pay business taxes at the PIT rate.
The Governor is again making his annual push for a Marcellus Shale extraction tax. This proposal would severely impact the gas industry and consumers. Pennsylvania already saw a $50 million reduction in its impact fee revenue, according to the latest Independent Fiscal Office report, as a result of reduced demand from COVID and lower gas prices.
The Governor is also proposing a $168 million plan to augment funding to the State Police by charging all municipalities for police services regardless of municipal coverage.
While the Governor is calling for a major spending increase in several budgetary line items, he is also planning to eliminate $5 million in state funding for broadband expansion, even though the funding is mandated by Act 132 of 2020 (Senate Bill 835), as well as millions of dollars for agricultural programs and health care services.
Regarding the Governor’s budget proposal, Senator DiSanto said, “This budget proposal is the latest example of the Governor’s failed leadership. For nearly a year, his use of prolonged and unprecedented executive power has made Pennsylvania a national leader in unemployment and business closures. It will take many of these workers and small businesses years to recover from this severe economic contraction, and yet the Governor is proposing to ‘help’ with a staggering increase in our state income tax and other costly burdens. Higher taxes and energy costs will only make Pennsylvania a less desirable place to live.”
DiSanto continued, “Governor Wolf and his incompetent ‘progressive’ appointees like former secretaries Levine, Oleksiak and Boockvar have mismanaged state government and this pandemic since the beginning. The Administration failed to protect our most vulnerable residents in nursing homes, shuttered entire industries that had remained open in other states, and forced millions into a malfunctioning unemployment compensation system. Even now, this Administration’s bungled vaccine rollout has caused chaos and confusion. Pennsylvanians have suffered under this Administration’s unilateral actions and ineptness that surprises even those of us who recognize the dangers and futility of big government and its perpetually unfulfilled promises of a better life. Our residents and businesses cannot afford Governor Wolf’s new taxes, and I will fight to implement a state budget that funds core public services while living within our means.”
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