Governor Wolf Reveals 2016 Pennsylvania Budget Proposal

On Tuesday, February 9, Pennsylvania Governor Tom Wolf announced his 2016 budget proposal.   While the governor and the legislature continue to work on finishing the 2015 budget, Governor Wolf has again proposed a series of tax increases amounting to nearly $3 billion.  His new budget proposal includes the following:

Governor Tom Wolf's Second Pennsylvania Budget Proposal

• Increasing the personal income tax from 3.07% to 3.4%.
• A severance tax on natural gas drilling of 6.5%.  This proposal differs from his previous proposals in that it no longer includes a tax based on the volume of gas extracted.
• Expanding the sales tax base to include basic cable television, movie theater tickets, and digital downloads, while maintaining the rate at 6%.
• Increasing the bank shares tax, cigarette tax, and a new tax to include non-cigarette tobacco products.
• A surcharge tax on fire, property, and casualty insurance premiums.
• A new 8% tax on casino promotional play.

Unlike the Governor’s prior proposals, this budget does not offer property tax relief.  The additional revenue raised will increase funding for education, human services, and corrections.  Additionally, the budget assumes that the December 2015 tentative agreement, which has been declared dead by Republican leaders, will be enacted into law this year.

The Republican legislature greeted the 2016 budget proposal as a nonstarter for negotiations.  It appears that the Governor and legislature will continue to remain at odds over tax increases and spending amounts for the foreseeable future. 

Contact us with questions about how the Pennsylvania State Budget could affect you and visit our State and Local Tax services page to learn about services that we provide.