Governor calls for $3 billion in new taxes

Despite an ongoing budget fight with the Pennsylvania Legislature, Gov. Tom Wolf said Tuesday that the state’s crisis is not about politics, but rather math.

The state is facing a $2 billion budget deficit that is neither a Democratic fact nor a Republican fact, just a fact, Wolf said in presenting his proposed 2016-17 spending plan.

“This deficit isn’t just a cloud hanging over Pennsylvania’s long-term future. It is a time bomb, ticking away, right now, even as I speak,” said Wolf in his budget address. “If it explodes – if the people in this chamber allow it to explode – then Pennsylvania will experience a fiscal catastrophe the likes of which we have never seen.”

Wolf presented next year’s proposed budget that includes nearly $3 billion in additional revenue through a series of tax hikes. He’s also proposing increasing education spending by about 22 percent.

Republicans are objecting to the Democratic governor’s tough budget address in which he told lawmakers they’d helped make Pennsylvania’s finances a ticking time bomb, and to deal with it responsibly or find a new job.

Republican House Speaker Mike Turzai said Wolf’s tone was unstatesmanlike and petulant. But House Democratic leader Frank Dermody said “the truth hurts.”

Top Republicans also say they’re committed to dealing with the deficit without raising taxes, and say that Wolf’s proposal includes billions in extra spending.
The governor’s budget fight with GOP lawmakers is seven months deep into the current fiscal year, without a full-year spending plan in place.

Here are some of the highlights of the governor’s proposed spending plan.

THE BIG PICTURE

– Increases spending through the state’s main bank account to nearly $33.3 billion. That is a two-year increase of $4.3 billion, or 14 percent, from the last full-year, enacted budget.

– Raises taxes by nearly $3 billion on income, sales, natural gas drilling, insurance premiums, banks and tobacco.

– Does not revive a $3.2 billion school property tax relief plan he proposed last year as part of an effort to shift burden of public school funding away from local school districts.

STATE TAXES

– Income: Increases rate 11 percent, to 3.4 percent from the current 3.07 percent, to raise $1.4 billion. Effective Jan. 1, 2016.

– Sales: Keeps rate at 6 percent, but eliminates exemptions on basic cable TV, movie theater tickets and digital downloads to raise $415 million. Effective April 1, 2016.

– Cigarettes: Raises per-pack tax to $2.60, from $1.60, to raise $468 million. Effective April 1, 2016. Extends a 40 percent wholesale tax to sales of cigars, loose tobacco, smokeless tobacco and electronic cigarettes to generate $136 million. Effective May 1, 2016; for loose tobacco, effective July 1, 2016.

– Natural gas: Imposes a new tax on natural-gas production – 6.5 percent of value – to generate $218 million. Effective Jan. 1, 2016.

– Insurance premiums: Imposes a surcharge of 0.5 percent of premiums to fire, property and casualty insurance to generate $101 million. Effective Jan. 1, 2016.

– Casino gambling: Imposes new 8 percent tax on promotional plays at casinos to generate $51 million. Effective Jan. 1, 2016.

– Banks: Raises rate of shares tax on bank and trust companies to 0.99 percent, from 0.89 percent, to generate $39 million. Effective Jan. 1, 2016.

– Tax forgiveness: Expands eligibility limits to families of four making up to $36,400, for a tax expenditure of $83 million. The current limit is $34,250. Effective Jan. 1, 2016.

EDUCATION

– Increases aid for public school operations and instruction by $565 million, a two-year increase of 10 percent to $6.3 billion.

– Increases early-childhood education funding by $90 million, an increase of 54 percent to $256 million.

– Increases special education funding by $70 million, a 6.5 percent increase, to $1.15 billion.

– Increases aid to higher education, including state system universities, state-related universities, student grants and community colleges, by 5 percent to $1.7 billion.

DEPARTMENT SPENDING

– Education: Grows 22 percent over two years, to $12.9 billion.

– Human services: Grows 12 percent over two years, to $12.7 billion.

– Corrections: Grows 22 percent over two years, to $2.6 billion.

Wolf’s complete budget address is available on the governor’s website.

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2 female Pennsylvania residents test positive for Zika virus

Two female Pennsylvania residents have tested positive for the Zika virus, according to state health officials.

The Pennsylvania Department of Health said Tuesday that the two had recently traveled to countries affected by the ongoing outbreak of th…

Sanofi Pasteur working hard on Zika virus vaccine

Last week Sanofi Pasteur announced it’s launching a new effort to develop a vaccine to prevent the Zika virus.

The company says it has researchers working on it around the clock.

State health authorities say two female Pennsylvania residents have tested positive for the Zika virus.

The virus is spread by mosquitoes and many of the cases in the United States are returning travelers from tropical and sub-tropical climates where they could have been exposed to the virus.

“It is very likely that other countries will soon see Zika being seen in their country,” said Nicholas Jackson, global head of research for Sanofi Pasteur.

Even if the mosquito carrying the virus is not in the U.S., it hasn’t stopped elected leaders like U.S. Senator Pat Toomey from calling for more research and a vaccine.

“This is a call to action for us as an organization,” added Jackson. “It is our mission to produce vaccines to prevent these terrible diseases and give a public health solution to communities and ministries around the world.”

Sanofi Pasteur has a lab in Monroe County and the company has already worked on several other vaccines from the same family of viruses, according to researchers.

Now some of the brightest scientific minds in the world are working on finding a way to identify the Zika virus and to find a way to help prevent infection.

“They are world experts, they are excited by this project and this challenge and they are in house today ready to work on this,” said Jackson.

So far there is no time line on when a vaccine could be ready for market, but the company says it has the technology and the global manpower to get it done quickly.

Berks lawmaker on Pennsylvania Gov. Wolf: ‘He was insulting’

Republicans in Harrisburg are blasting Pennsylvania Governor Tom Wolf after he presented next year’s proposed budget that includes nearly $3 billion in additional revenue through a series of tax hikes.

“It was a campaign speech. I mean, he was insul…

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Easton school board president questions community college’s funding increase

Easton Area School Board President Frank Pintabone thinks the district shouldn’t increase its contribution next year for Northampton Community College.

The Easton Area School Board president doesn’t think Northampton Community College should get increased funding from his school district next year.

And he called on his peers on the school board to approve the same contribution as this year, but no more.

Board President Frank Pintabone said the district has its own financial problems without having to worry about increased contributions for the community college.

“It’s to the point where everyone is pulling their belts tight, but I don’t see that in the community college,” Pintabone said.

The college is asking for a 1.9 percent increase, about $48,000, according to Easton Area School District Chief Operating Officer Michael Simonetta.

Bangor Area School Board objects to NCC funding formula

The Bangor Area School Board in January directed board member Pam Colton to research changing the funding formula for the sending districts that pay into the Bethlehem Township-based community college.

Pintabone wants to call on other sending districts to join Easton in opposing funding increases to the community college.

No one on the Easton Area board was willing to commit to Pintabone’s stance at this point, although they agreed to revisit the issue in March after they have more time to review the community college budget.

Robert Fehnel, the Easton Area School Board liaison to the college, said the district benefits financially from the college when its graduates get jobs in the community and in turn contribute their earned income taxes to district coffers.

Rudy Miller may be reached at rmiller@lehighvalleylive.com. Follow him on Twitter @RudyMillerLV. Find Easton area news on Facebook.

Steve Curto, champion of Easton youth, dies at 84

Curto, a retired union official, was affiliated with the Easton Area Community Center for decades.

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