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Where could Pennsylvania's budget-builders turn for revenue? Some potential solutions

What taxes could wind up on the list of revenue-raisers in the Pennsylvania budget debate this year? Here are some possibilities to watch.

Gov. Tom Wolf will formally launch the conversation on Feb. 7.

1. Be optimistic.

State revenues are running short of expectations this year? Don't sweat it.

Take the hopefulness being generated in some quarters by this brand new Trump Administration economy and run with it. Hey, it's working for Wall Street, right?

Why not Pennsylvania?

Projecting growth in the existing tax base, as long as it can be justified, is the easiest piece of any budget pie.

2. The conversation starters.

A) Marcellus Shale severance tax.

Gov. Tom Wolf has always supported instituting a severance tax on natural gas production in the Marcellus Shale region, and he's expressed his interest in going that way again.

It's an issue that always has drawn some level of bipartisan support in the state Legislature, but has not yet passed muster with House or Senate Republican leaderships.

With Wolf having voluntarily taken the state personal income tax and sales tax off the table for 2017-18, is it possible that this tax play will be taken more seriously?

B) Gambling expansion.

There appears to be a growing coalition emerging at the Capitol in support of bringing casino-operated, internet-based gaming to Pennsylvania.

It's actually overdue, considering the current year budget was built on $100 million in projected licensing fees, though the sticky matter of actually passing legislation to authorize this or any other new games was left undone last year.

But this is never a slam dunk.

Gaming debates in Pennsylvania have historically brought out a swarm of competing interests that - coupled with opponents of further expansion - often end up neutralizing each other and preventing anything from getting passed.

3. Last year's hot number.

One of the proposals that really gathered steam as budget talks progressed last year was an expansion of the state's gross receipts tax - imagine a sales tax on certain utilities - to the provision of natural gas.

Gross receipts taxes are already paid by users of electric, cellphone and other utility services as part of their monthly bills.

Leaders last year seriously considered extending its reach to natural gas users, which were specifically exempted from the gross receipts tax in 2000 as part of a larger, market deregulation move.

One key question: Wolf is already expected to lead with a severance tax. Doing both may seems like too much of a double-whammy to an industry that has led the league in evading taxes in recent years.

4. The Clawback.

Several sources reached for this story said they expect Wolf's staff is seriously pouring over the hundreds of millions of dollars the state foregoes each year in tax credits, exemptions and other loopholes.

Some things are known to be safe, like the longstanding sales tax exemptions on food, clothes and many personal services. Wolf is also not expected to go after the popular educational improvement tax credit program.

But many other credits, like the $65 million in tax credits to film production, have drawn resistance from the governor in the past, sources said, in part because of the circuitous way they often get used.

5. Unfinished business.

A) Making our list primarily because the Wolf Administration thought it was worthy last year is a 0.5 percent surcharge added to premiums paid on fire, property and casualty insurance policies.

Is that fair? Not necessarily.

But if it was good enough to make the governor's list last year, and the need for new revenues is every bit as great, you've got to wonder.

6. Is it time for this?

Philadelphia's tax on sweetened beverages has passed its first court test and is now in effect. it is expected to raise about $90 million per year for the city, so the mind reels at what a similar tax could raise if applied statewide.

It is also, as of the November election, the hot new tax in America.

But before you start stockpiling your favorite soft drink, sources reached for this story said that, to this point, they were not aware of any serious plans by the Wolf Administration to impose a soda tax.

Source: PennLive.com

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