Update on the State Budget as of July 8

Discussions between House and Senate leadership and the governor continue; the two sides have not yet reached an agreement on a new budget proposal. The governor has proposed raising the state’s 6 percent sales tax to 6.6 percent – a 10 percent increase – and the personal income tax from 3.07 percent to 3.7 percent – a 20 percent increase – to raise about $4 billion. (Philadelphia’s 8 percent sales tax would remain unchanged.)  Much of the money raised in the governor’s proposal would go toward funding the governor’s proposed property tax-relief plan, worth $3.8 billion, for all 500 school districts in Pennsylvania.  The governor has also proposed a new 5 percent tax on natural gas drillers, plus a per-cubic-foot fee on gas, which together would raise roughly $1 billion for public education.

Republican leadership are open to raising new revenue, but are not supporting the governor’s plan to raise the state’s personal income and sales taxes. Yesterday, the state senate announced session days for Monday, Tuesday, and Wednesday next week. If no budget agreement is reached, it is unclear what actions the state senate will take while they are in session.

In the meantime, we ask you, your employees, and the families that you serve, to continue to contact your legislators and the governor, to tell them know it is imperative to fully fund human service programs in a timely fashion, and if they do not, how it will affect your business and the services you provide to the most vulnerable residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget. Additionally, we encourage our members to send in letters to the editor.

Contact Jack Phillips, RCPA Director of Government Affairs with any questions.