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Gov. Wolf's Budget Address Outlines Far-Reaching Overhaul of Taxes -- Some Up, Some Down

By Tony Romeo and Todd Quinones

HARRISBURG, Pa. (CBS) -- As expected, Pennsylvania governor Tom Wolf today delivered a budget address that proposes wide-ranging changes to the state's tax structure.

In an address to a joint session of the legislature, Wolf outlined which taxes he would like to see go down, and which taxes he would like to see go up.


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(A graphic provided by the Wolf administration showed the breakdown of the governor's proposed spending.)


The governor wants to raise the state's personal income tax by about 20 percent, from a rate of about three percent to 3.7 percent. And he wants to raise the sales tax rate from 6 percent to 6.6 percent, except in Philadelphia, where it would remain eight percent.

Wolf also said he wants to broaden the list of things that get charged sales tax. That would generate revenue to allow for wage tax relief in Philadelphia and school property tax relief elsewhere.

"Overall, my budget will reduce average homeowners' property taxes by 50 percent, putting more than $1,000 each year into their pockets," the governor said.

Wolf also called for a tax on natural gas drilling, to increase the state's contribution to public schools to 50 percent.

That could bring as much as $150 million to the financially strapped Philadelphia School District.

Mayor Nutter says, "Goes long way to financial security."

The governor also wants to raise the cigarette tax $1.00 per pack statewide. At the same time, he proposes to eliminate that $2 per pack cigarette tax imposed last year in the City of Philadelphia for schools.

The governor's budget secretary says even if you factor in the increases in the income and sales tax, homeowners will come out ahead by about 13 percent, based on the property tax relief they'd get.

He also wants to overhaul the state's corporate tax structure and wants to increase the minimum wage to $10.10 per hour.

Now he will have to get his proposals through the state House and Senate, both of which are controlled by Republicans.

The state Senate majority leader dismissed Wolf's proposals as "not grounded in reality."

But republicans like Delaware County Senator Tom McGarrigle are not sure math adds up.

The party leadership is saying Wolf's budget increases spending by 16 percent.

But now begins the tough fight for Wolf.

He has to get his budget that increases spending passed by republican controlled legislature.

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