House Scheduled to Vote on Governor’s Revenue Plan
 
As widely reported in the state press, Republican legislative leaders have promised Governor Wolf an up-or-down vote on his tax proposals.  They don’t believe that he can gain the necessary votes to fund the spending increases he seeks in his budget proposal, and they hope that he will compromise on spending if his tax proposals fail.  The State House has scheduled a vote on Wednesday on Governor Wolf’s tax proposals.  If the bill passes the House, Senate Majority Leader Corman (R-Centre) has promised a Senate vote the following week. 
 
Specific language on the bill to be voted is not yet available, so it is unclear if all of Governor Wolf’s tax proposals included in his March budget proposal will be included in this iteration.  In March, Governor Wolf proposed an increase in the personal income tax from 3.07% to 3.49% as well as a sales tax increase and expansion on items to be taxed.  Included in that sales tax expansion was a new tax on college meal plans, textbooks, activity fees and other nontuition fees.  The proposal may also include the bank shares tax, tobacco taxes and a severance tax on gas from the Marcellus Shale.  House Democrats indicate that they believe there could be votes for some of the Governor’s proposals, such as the severance tax. 
 
House Majority Leader Dave Reed (R-Indiana) noted: “If they [the Governor] want to come out and publicly take things off the table—that’s  what we’ve asked the Governor to do privately:  Take the things we know we don’t have the votes for off the table, and let’s discuss the things that maybe, potentially, you could get the votes for.  He refuses to do so and that’s why we’re at this fork in the road and there seems to be no other way to convince the Governor the votes are not there in the House or in the Senate.”  The Governor’s spokesman Jeff Sheridan responded that “Republican leaders have shown time and time again that they have no desire to negotiate in good faith with Governor Wolf because they are fighting to embrace the failed Harrisburg status quo that has underfunded education and created a multi-billion dollar deficit.” (Capitolwire, September 30)
 
To keep the pressure on for a full budget, the Governor vetoed the stop gap budget measure passed by the House and the Senate last week. If the tax plan passes the House, then the Senate will take it up next week.  If the vote fails, as is expected, then the Republican leaders will be asking the Governor to amend his budget to reflect a lower spend number.  Last week, the Governor issued an order imposing a conditional hiring freeze, travel ban and purchasing restrictions on state agencies.  Some speculate that the next step may be state worker layoffs. 
 
Did you know?  Revenue for the first quarter of the fiscal year was strong with the General Fund revenue exceeding the Independent Fiscal Office (IFO) estimates by $74 million.  For the first quarter, $2.73 billion was collected for General Fund revenue.