State Budget and Taxes

Unintended Consequences? Property Tax Elimination Increases Taxes on the Middle Class to Reduce Taxes for high income families

The budget end game has focused a lot on property tax cuts. The budget framework agreement includes property tax relief, the allocation of which has not yet been worked out. And now the Pennsylvania Senate will consider SB 76, a bill to eliminate school property taxes early next week. Property tax elimination would be paid for by raising the sales tax rate to 7 percent and expanding it to cover more services, and by raising the personal income tax rate to 4.34 percent.

October Payrolls Up Overall but Down in Mining, Logging and Schools

This morning the Bureau of Labor Statistics reported that the unemployment rate in Pennsylvania was down slightly to 5.1 percent, and nonfarm payrolls were up by 13,700 jobs last month, each from their respective September levels.

After two months of declines in nonfarm payrolls, the return to growth in October was  a welcome change.

Who Pays For An Increase in the Sales Tax: Analysis of the Tax Incidence of an Increase in the Sales Tax from 6% to 7.25%

Today we released new analysis of the tax incidence of a proposal to raise the state sales tax rate from 6% to 7.25%.  Gov. Wolf and legislative leaders are currently negotiating over the terms of a plan to cut property taxes which would be financed by this sales tax increase.

What's It to Be on Property Tax Relief, PA Lawmakers? Reverse Robin Hood or Relief for Renters and Middle-Class Homeowners

This is an appeal to legislators in rural parts of Pennsylvania and in high-property tax areas such as the Poconos: we think that the evidence shows clearly that your constituents would benefit more from distributing the property tax relief promised by the tentative budget framework in a fair way, including a rebate for renters. There is a danger, however, that this relief will be distributed in an unfair way, without a renter rebate and with much tax relief going to businesses and high-income homeowners.

The Road Not Taken

Over the past few years, many other states, similar to Pennsylvania in 2011 and again today, have faced critical choices about whether to raise state revenues, hold firm to “no new taxes” or even cut taxes further. Today we released the results of our examination of the experience of four states, as well as Pennsylvania, and the different roads they each took.

Wednesday’s tax vote – legislators’ golden opportunity to honor their words

Gov. Corbett’s first budget, passed by the Republican-controlled General Assembly, cut funding for education by nearly $860 million. Two-thirds of these cuts – $570 million – remain in place, an average of $330 per student. In school districts attended by a quarter of students in the state – districts with lower incomes and higher poverty than in the rest of the state – the cuts remaining in place are much higher, $832 per student.

Collapse or growth – what’s at stake in next Wednesday’s revenue vote

Pennsylvania does not bring in enough revenue through current taxes and other fees to support budgets that adequately fund education and programs that improve the lives of thousands of our fellow Pennsylvanians. That is the reality that is captured by the term “structural deficit.” It is the situation that has led Wall Street to downgrade the commonwealth’s credit-worthiness five times in the last three years.

Stopgap veto – Hard decision for the right reasons

Gov. Wolf made a hard and painful decision when he vetoed the stopgap funding for schools and human service agencies. It is obvious to everyone that non-profits that rely on state and federal funding to serve the needs of the elderly, the disabled, the hungry and the abused cannot operate on thin air and good intentions. They need to pay staff, buy supplies and keep the lights on just like any other business. If they can’t pay their staff or their bills, they have no choice but to cut back services or close down altogether.

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