Wolf's proposal for expanded sales tax in Pennsylvania hard to sell
HARRISBURG — Michele Andrae said the last thing her daughter needs is to pay more for college textbooks.
Gov. Tom Wolf proposes applying the state sales tax to textbooks, fees and college meal plans, his office says. Andrae, 53, of Monroeville said her daughter, who attends East Stroudsburg University, spent $800 on books last year. This year, they cost her about $1,000.
“She works, too. How's she going to afford that? That's crazy,” Andrae said.
Raising the sales tax and expanding its base to dozens of items and services now exempt are part of Wolf's $30 billion-plus state budget that lawmakers will begin scrutinizing Monday.
Budget hearings run through April 1. The Department of Revenue will be among the first agencies to come before the House Appropriations Committee, whose members are expected to grill Wolf's nominee for Revenue secretary, Eileen McNulty, about the governor's plans.
Wolf, a Democrat who will negotiate with a Republican-controlled Legislature, said he could close a state deficit, provide property tax relief and boost education spending by increasing the sale and personal income taxes, levying a tax on natural gas extraction, raising the tax on cigarettes and taxing other tobacco products.
Individual parts of his plan cannot “be looked at in a vacuum,” Wolf spokesman Jeffrey Sheridan said.
College tuition and dormitory expenses would remain untaxed, Sheridan said, and the governor, in exchange for additional funding for state-owned schools such as East Stroudsburg, wants such institutions to freeze tuition.
Expanding the sales tax to include 45 more items would bring in $1.2 billion, according to the Revenue Department.
Wolf would increase the tax from 6 percent to 6.6 percent — or 7.6 percent in Allegheny County — to raise $377 million more. Currently exempt items that would be taxed cover a wide range including non-prescription drugs, cable television, funeral services, spectator sports and legal services.
Clem Gigliotti, 40, a lawyer from Canonsburg, disagrees with a sales tax on legal services.
“We don't look favorably on that,” he said, referring to a group of fellow lawyers visiting the Epiphany Catholic Church fish fry.
Kerry Browne, 64, of Whitehall said he was “a little surprised” at Wolf's “overreaching” plan to broaden the sales tax.
“There's a litany of things that could be going up,” Browne said. “I understand there's a $2 billion deficit. I don't worry one bit about charging Marcellus shale companies an extraction tax, and I don't mind paying more in income tax, because for me it's important to have a realistic reduction in property taxes.”
“I'd be in favor of it because property taxes are pretty high,” said Steve Brice, 35, of Mt. Lebanon.
With sales tax, he noted, consumers have a choice.
Wolf's complicated plan appears to require serious public scrutiny, said J. Wesley Leckrone, a political science professor at Widener University in Chester. Leckrone expects “an intense level of questioning about how this really works.”
A governor's first budget naturally draws more interest than usual, said House Appropriations Chairman Bill Adolph, R-Delaware County. How departments spend state money and what Wolf proposes to collect in taxes are central to the debate, Adolph said.
“What's the rationale for these taxes? What is being taxed, and what is not being taxed?” he asked.
Edward Reiss, 45, of Plum said it makes “no difference” to him whether the state tries to get revenue through additional income and sales taxes — or how it handles school property taxes.
“It doesn't matter if they're taxing property or (taxing) buying stuff. They're going to get their money either way,” Reiss said.
Likewise, Richard Razewski is not convinced Wolf's proposed $3 billion-plus property tax reduction will save the average homeowner 50 percent, as the governor touts.
“That's a joke,” said Razew-ski, 74, a retired machine tool salesman in White Oak. “Even if you lower them, they'll go back up.”
Razewski does not oppose the idea of expanding the sales tax base. In fact, he would like to see lawmakers lower the sales tax but apply it to all items currently exempted — including food, clothing and medicine, which Wolf did not include.
Sheridan said Wolf's plan to reduce property taxes is larger than any attempted before. Wolf would include restrictions to make it difficult to raise property taxes again, he said.
Razewski, a registered independent, agrees with Republicans who say any new revenue should come first from selling the state liquor stores. He said legislators need to move Pennsylvania's “antiquated state stores into the 21st century.”
Wolf supports “modernizing” the 600 stores that sell spirits and wine to attract more revenue. That could include changes such as lifting restrictions on Sunday sales, expanding hours and allowing small state stores in grocery stores.
Valinn Milligan, 34, of Monroeville smokes two or three packs of cigarettes a week. He said he won't buy cigarettes if Wolf's $1-a-pack tax makes it into the final budget.
“It already costs too much for cigarettes,” Milligan said. “I'm hoping to quit now, but if that happens, I'll really quit.”
Jack Scassera was finishing a small cigar inside a tobacco shop Thursday when asked about the governor's proposals.
“I don't smoke enough that it would affect me,” said Scassera, 69, of Monroeville. “It's going to affect the people who smoke a lot, though, and the people who smoke the most are usually from a lower socioeconomic situation.”
Brad Bumsted and Gideon Bradshaw are Trib Total Media staff writers. Staff writer Bobby Kerlik contributed to this report.