Governor Wolf unveils 2015-16 budget

Property tax reform is among his highest priorities, announced Governor Tom Wolf.

During his first budget address on March 3, 2015, Wolf laid out his plan to increase school funding, while reducing the tax burden on homeowners in Pennsylvania.

Last session, the Pennsylvania Association of Realtors® (PAR) engaged in a campaign to eliminate the school property tax in Pennsylvania. That plan, Senate Bill 76, would have eliminated property taxes dedicated to school districts and to replace the funding by raising the personal income tax from 3.07 to 4.34 percent and increasing and broadening the sales tax from 6 to 7 percent to include previously exempted items.

Gov. Wolf’s proposal would not eliminate the school property tax, but he believes it will reduce the average homeowner’s property tax bill by 50 percent. To do that, the governor proposes imposing a tax on natural gas extraction, as well as an increase in personal income tax and sales tax.

He estimates that the extraction tax will raise more than $1 billion in annual revenues. The extraction tax, coupled with the increases in personal income tax (to 3.7 percent) and sales tax (to 6.6% and expanded to all untaxed services), will be enough for the state to increase their share of school funding from 35 percent to 50 percent.

This property tax reform is expected to decrease the total tax burden on average middle-class homeowner by 13 percent.

“My budget rebuilds the middle class in Pennsylvania starting with three priorities: jobs that pay, schools that teach and government that works,” said Gov. Wolf.

“Pennsylvania can have a bright future, but we cannot simply do the same things over and over and hope for different results. My plan balances the state budget, cuts taxes to create jobs with good middle-class wages, makes historic investments in education to prepare our kids for the jobs of tomorrow, and reduces the total tax burden on the average middle-class homeowner. We need to think differently and do things differently. It’s time for bold change,” added Wolf.

To read the complete proposed 2015-16 Governor’s Executive Budget, visit the Governor’s Budget Office website.