Gov. Wolf's Tax Plan Would Devastate Dale


Dale Kaplan is a survivor. His family-run dry cleaning business has weathered declining volume, thanks to innovations like no-iron dress shirts, and a devastating fire. Now Dale’s 27 year old business is facing a new threat- Governor Wolf's tax plan.

Governor Wolf's latest tax proposal would raise the income tax by 14 percent, and impose the sales tax on select services like dry cleaning, basic cable TV, amusement and recreation, and wedding planning. 

Dale's worried he can't take another hit.

"I've gone from 29 to 14 employees. I work half of the day, I'm here at seven in the morning and I go home at seven in the night."

He's especially worried after seeing the effects of a sales tax in neighboring Ohio.

"One of my friends has some locations in Ohio. When they put sales tax on dry cleaning in Ohio his business, in 12 months, went down 15 percent gross volume. That's damaging."

The Kaplans and small business families like them would suffer a double whammy under the governor's plan. In addition to the new sales tax on dry cleaning services, they'd also have to pay a higher personal income tax. So much for the middle class tax relief Governor Wolf promised.

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Can You Afford $1,000 More?


On Wednesday, the Pennsylvania House of Representatives is scheduled to vote on a major tax increase. This vote will be, in all likelihood, on a proposal Gov. Tom Wolf offered in September, rather than his original proposal.

The major differences are that Wolf's new plan includes a narrower expansion of the sales tax (basic cable TV, dry cleaning, amusement and recreation, and other personal services), no sales tax rate increase, and a 14 percent increase in the income tax.

On the flip side, Wolf's new plan includes no property tax relief, and no reduction in the corporate income tax rate.

In total, Wolf's tax hike would take $1.8 billion more from taxpayers for this fiscal year, and $3.2 billion more next year, after all taxes have taken effect. That represents an increase of more than $1,000 per family of four.

Gov. Wolf's Proposed Tax Changes
Item 2015-16 2016-17
State Tax Rate Changes Total Revenue Per Family of Four Total Revenue Per Family of Four
Severance Tax of 5% and 4.7 cents per MCF - Jan 1, 2016 (net of impact fee) $99,000 $31 $353,000 $110
Personal Income Tax Rate Increase to 3.49% - October 1, 2015 $1,100,000 $344 $1,700,000 $532
Personal Income Tax Imposed on Lottery - July 1, 2015 $7,800 $2 $16,300 $5
Sales Tax Expanded to untaxed items and services - January 1, 2016 $263,000 $82 $689,000 $216
Bank Shares Tax - immediate rate increase $44,000 $14 $46,000 $14
Cigarette Tax increase $1 per pack - November 1, 2015 $302,000 $94 $438,000 $137
Tobacco Products (not large cigars) and eCigarettes tax of 40% on wholesale price - January 1, 2016 $37,300 $12 $95,000 $30
Sales Tax Increase from Cigarettes $8,000 $3 $13,000 $4
Total State Tax Increases $1,861,100 $582 $3,350,300 $1,048
Tax Forgiveness ($80,000) ($25) ($106,000) ($33)
Net Tax Increase $1,781,100 $557 $3,244,300 $1,015


You can read more about this tax plan in our latest policy memo.

Governor Wolf and his special interest allies are already calling lawmakers to pressure them to vote for higher taxes. They need to hear from you too.

Join us in telling your legislators and Gov. Wolf—No New Taxes!

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Wolf Truth Squad: Tax Hikes on Working Families


As noted yesterday, the Pennsylvania House of Representatives has scheduled a vote on Gov. Tom Wolf's latest tax proposal for Wednesday, October 7.

If you follow Gov. Wolf on Facebook, you've probably seen a slew of taxpayer-funded memes, arguing for a budget that includes a "severance tax for education. That's not what this tax plan does.

The severance tax would generate only $99 million in the first year—only 5 percent of total new revenue. In 2016-17, the severance tax—after replacing “impact fee revenues”—would generate only $353 million, or slightly more than 10 percent of the total in new taxes.

In contrast, the overwhelming majority of revenue in Wolf’s tax plan comes from income and sales tax increases—yet you won't find one mention of these things on his Facebook page.

Wolf would raise the income tax by 14 percent, and impose the sales tax on basic cable TV, dry cleaning, amusement and recreation, and other personal services. These taxes would be borne directly by working families.

  • In 2015-16 Wolf would take $1.8 billion more from taxpayers—77 percent via income and sales tax.
  • In 2015-16 Wolf's tax increase would yield a $3.2 billion net increase—74 percent from income and sales tax.


You can read more about this tax plan in our latest policy memo.

Governor Wolf and his special interest allies are already calling lawmakers to pressure them to vote for higher taxes They need to hear from you too.

Join us in telling your legislators and Gov. Wolf—No New Taxes!

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The Mirage of Green Jobs


Promoters of the U.S. Environmental Protection Agency’s carbon-emission regulation attempt to playdown the jobs it would kill with promises of “green jobs”. Yet these positions pay less and are largely dependent on unreliable taxpayer subsidies for solar and wind.

"We are applying for federal grants to retrain miners for jobs that will pay less than half of what they can make in the mines,” says Robbie Matesic, executive director of the Greene County Department of Economic Development. “The hardest thing is telling a third-generation coal miner that the layoff this time isn’t just a fluctuation in the market, but will be permanent.”

A combination of tightening environmental regulations and competition from natural gas has the coal industry struggling for survival. The latest EPA effort to combat global warming seeks to sharply decrease emissions of carbon dioxide from power plants, but it's projected to reduce the earth’s temperature by less than one-tenth of a degree Celsius by the year 2100.

Still visions of green jobs are routinely advanced by environmental interest groups, President Obama and other politicians as they push EPA’s “Clean Power Plan.”

“When you shift to renewables, you’re creating good green jobs in wind and solar,” says state Rep. Greg Vitali (D-Delaware and Montgomery). “It’s really a job creator when you’re shifting to renewables.”

Sounds nice: You replace “dirty” coal with trouble-free “green” jobs. No fuss, no muss, just nirvana. But it hasn’t worked in the past, according to the Pittsburgh Post-Gazette’s PowerSource:

“The solar sector in Pennsylvania has shed 30 percent of its workforce since 2012, when the state ranked fifth in the country with 4,000 jobs, according to (The Solar Foundation). Pennsylvania’s 2,800 jobs in 2014 placed it at 15th in the country and, when looked at as a percentage of the state’s working population, the state dropped to 37th…

“Factors in the shift include a Pennsylvania rebate program that vanished, a federal tax credit that is scheduled to wane and the fact that the state’s market for renewable energy credits — designed to incentivize projects and prove compliance with the state’s renewable goals — has suffered from oversupply with credits purchased from other states.”

The Pennsylvania Manufacturers’ Association estimates that each green job costs taxpayers $300,000 in subsidies.

Back in Greene County, Ms. Martesic sees more possibilities for displaced coal workers in metals and advanced materials manufacturing, although she says that the transition will take more than “a year or two” that regulators currently are allowing. She also says manufacturing will require “reliable energy” supplies. In other words, energy that’s available when the sun isn't shining and the wind isn’t blowing. 

With the possible demise of coal-fired plants that supply 40 percent of the state’s electricity, and the limitations of today’s renewables, it is disingenuous to ignore the significant job losses Pennsylvanians will experience if the EPA gets its way.

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Tax Hike Vote: Four Things to Know


Legislative leaders have promised that on Wednesday October 7, they will hold a vote on a major tax increase proposed by Gov. Tom Wolf. This tax hike is different than Gov. Wolf's original budget proposal, but still represents a significant new burden on working families.

Here are four things to know about this vote:

  1. Wolf’s tax hike represents an increase of more than $1,000 per family of four when fully implemented.
  2. There are no property tax relief provisions included in this plan.
  3. The severance tax (net of impact fee reimbursements) represents only 5 percent of new revenue in the first year, and 10 percent in the second year. Despite the talking point of a "tax drillers for education," most of the new revenue comes from income and sales tax increases—paid directly by working families. 
  4. Wolf’s tax increase would result in the loss of 14,000 total jobs.

You can read more about this tax plan in our latest policy memo.

Governor Wolf and his special interest allies are already calling lawmakers to pressure them to vote for the budget. They need to hear from you too.

Join us in telling your legislators and Gov. Wolf—No New Taxes!


Wolf Veto = $11 Million Bill for Taxpayers


School districts have borrowed $346 million—and taxpayers will pay to pay up to $11 million in interest payments—as a result of Gov. Wolf’s budget vetoes, according to a report from Auditor General Eugene DePasquale.

DePasquale noted that this borrowing is due to the lack of tax dollars flowing out of Harrisburg—despite the fact the state is certainly still taking money from taxpayers.

At the press conference announcing these findings, Sen. Scott Wagner stood up to say he’s tired of taking blame for Gov. Wolf’s actions. That is, the House and Senate passed a budget—and subsequently passed a temporary funding plan—but Gov. Wolf’s vetoes denied funding for schools and social services.

Sen. Wagner is right. The only person to blame for schools having to borrow money is Gov. Tom Wolf, who vetoed the original budget in its entirety—rather than using the line-item veto as previous governors have done—and the temporary stop-gap measure.

Wolf says his vetoes are about education funding, but are they really?

Education spending is already at an all-time high, while Pennsylvania ranks among the highest spending states. The Republican-passed budget would have increased aid to public schools by another $350 million (and $1.4 billion more than four years ago).

Republicans even offered Gov. Wolf $300 million above that total.

Gov. Wolf thinks that’s not enough, and continues to cling to his demand for higher taxes on working families.

But there can be no doubt, Wolf is the only reason schools are struggling to make payroll.

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Fresh Start, or Stale Policies of Decades Past?


At the beginning of 2015, we heard a lot about a "fresh start" for Pennsylvania. But nine months later, it's difficult to identify anything fresh about Gov. Wolf's tax, borrow and spend plan.

In fact, Philadelphia Daily News columnist John Baer pointed out that every Pennsylvania governor since the 1970s has raised taxes. Reading that, I naturally thought, “Yeah, well maybe we should stop doing that.”

Some Democrats argue that tax increases are part of responsible governing, noting that every governor elected since the '70s - Milton Shapp, Dick Thornburgh, Bob Casey, Tom Ridge, Ed Rendell, Tom Corbett - raised taxes (the argument is Corbett's fuels-tax hike for $2.3 billion in road and bridge repairs counts).

But Republicans say maybe that's the problem. Maybe the state's economy would be better with lower taxes.

Nate Benefield, of the conservative Commonwealth Foundation, makes the case against raising taxes: "Overall, our tax burden has gone up, and yet we have stagnant growth, among the slowest in the country."

Pennsylvania's ranking in state and local tax burden, according to the respected D.C.-based Tax Foundation, is 10th heaviest among states and third heaviest among the most populous states, behind New York and California.

In other words, for 45 years Pennsylvania politicians have been raising taxes—resulting in anemic job growth, income growth and population growth.

Ironically,Gov. Tom Wolf suggests his $4.6 billion, $1,400 per family of four tax increase represents a new way of doing things in Harrisburg. Raising taxes to historic highs, while rejecting real pension reform or liquor privatization, isn't fresh or innovative. It's the same thing we’ve been doing for decades.

It’s time we stop repeating the same failed mistakes of the past.

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Who Will Vote to Raise Your Taxes?


Republican leadership in the General Assembly has announced they will allow a floor vote on a budget proposal that has the massive tax increases Gov. Wolf and government union leaders desire—if Democrats secure enough votes to pass it.

That’s a big “if.” Not only would every Democrat have to vote for the tax hike—and some Democrats have already expressed concerns—they would also need 18 Republicans in the House and six in the Senate to vote for their tax-and-spend budget.

Consider the gauntlet thrown down. Those who favor massive tax increases on working families would have to make their case publicly and defend their policy desires. In any event, CF will continue to expose the truth about what the Union/Wolf tax plan would mean for Pennsylvania taxpayers, businesses and families.

We know lawmakers are going to hear from special interests clamoring to take and spend more of your hard-earned money. But they need to hear from families like yours who would pay the bill.

Join us in telling your legislators and Gov. Wolf—No New Taxes!

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Secret Contract Leaves Taxpayers in the Dark


In a special Friday night voting session, board members in Monessen School District unanimously approved a new teachers’ contract, which runs through 2018. The terms of the contract, including the cost, is a secret. Still, local property taxpayers are now contractually obligated to foot the bill. Sound unfair? And Monessen is only the latest example of a secretive collective bargaining process that leaves taxpayers in the dark.

Whenever decisions over public money are made, government and elected officials need to be open and transparent. Taxpayers have the right to know how their money is spent. This is common sense. And it’s why a growing number of states are bringing more transparency to public sector labor negotiations. Here in Pennsylvania, the Senate has already passed contract transparency legislation. 

SB 645, sponsored by Sen. Patrick Stefano (Westmoreland), requires a summary of public sector collective bargaining agreements be posted on state, school district, or local government websites two weeks prior to signing. This allows taxpayers to see cost projections and raise objections if the proposed contract does not represent the best interest of taxpayers and workers. 

The Pennsylvania House now has an opportunity to take up SB 645.

Without reform, taxpayers will continue to be stuck paying for secretive backroom deals as exemplified in Monessen School District. Notifying the public after a labor contract is already signed is too little, too late, as there is no turning back. Instead of treating taxpayers as an afterthought, lawmakers should make labor contracts transparent and give Pennsylvanians a seat at the table.   

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Wolf's "Loser" & "Phony-Baloney" Proposals


Last week, Gov. Wolf unveiled new, bad policy ideas—to slightly adjust a misguided pension proposal, and to propose a private manager to a government run liquor monopoly. 

But just as it was with the fabled wardrobe-challenged emperor, we aren't the only ones who have seen through the Governor's new clothes. Editorial boards across Pennsylvania have pointed out Wolf's new proposals are transparent and immaterial.

Lehigh Valley Live writes (emphasis added)

Instead of offering a real compromise, Wolf dredged up what can only be called Reform Lite — privatizing the management of the liquor system (but not the ownership or the workforce). He also came down in price on his hybrid pension proposal, saying that the earnings of new state employees over $75,000 would be shifted to a defined-contribution pension plan (down from his earlier ceiling of $100,000).

Non-starters, both.

Leasing the Liquor Control Board's management function to a private firm 10 to 25 years, as Wolf proposes, is worse than doing nothing, because it would prevent conversion to a market-driven system during that time. Nothing in Wolf's offer would greatly increase service or selection, or reduce prices. The unionized sales force would stay in place. So would the number of stores. Wolf's idea to extend beer and wine sales to convenience stores and restaurants is tepid at best, and pits government against private enterprise.

The Pittsburgh Post-Gazette adds (emphasis mine):

The plan is a loser. It privatizes nothing. What’s worse is that by projecting an aura of private operation it could perpetuate Pennsylvania’s antiquated system for far longer. The state needs to get out of the liquor business, once and for all, as soon as possible, without the use of Tom Wolf’s smoke and mirrors.

The Bucks County Courier Times editorializes (emphasis mine): 

Now that we’ve gotten an unvarnished look at those “historic” reforms, here’s our take: phony-baloney “reforms” that create the appearance of movement for a Democratic governor locked in a budget impasse with Republican legislative leaders. 

Lastly, Lancaster Online pans the proposal, urging Wolf to look to real liquor store privatization:

Forget his proposal last week to offer a long-term lease to manage the state liquor stores; private firms would bid on a contract to manage the system, which would stay under state ownership.

If Gov. Wolf can make a deal with Republican leaders that would make good on his promise to boost  funding for Pennsylvania’s public schools, he should  choose our children over the unions that oppose privatizing our state-owned liquor stores. If he fails to do so, he could lose the support of those who elected him because they’re rightly frustrated with the human costs of the ongoing budget impasse.

Gov. Wolf may have trotted out new clothes last week, but they don't cover up the bad policies he started with.

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