The Brief: Will Tom Wolf’s Big Bold Budget Flummox Republicans?

Gov. Wolf. | Photo Credit: Jeff Fusco

Both Mayor Nutter and Governor Wolf will introduce their proposed budgets next week. There, the similarities end. Nutter, in caretaker mode, seems certain to offer up a mostly status quo plan next Thursday. The big wild card is how he’ll respond to the School District of Philadelphia’s $103 million “ask” of the city. There are no palatable options available for Nutter and, truth be told, City Council will probably end up doing what it wants no matter what Nutter pitches.

Governor Wolf’s address this Tuesday, however, is shaping up as something far more interesting. The state is staring down a $2.3 billion deficit, and Wolf has a panoply of expensive ideas and initiatives he wants to fund, starting with significant new cash for schools statewide. The assumption is that he’ll call for some significant tax hikes. But we also know Wolf wants some big tax cuts, namely on local property taxes and  the corporate tax rate, which now stands as the second-highest in the nation.

We already know Wolf will propose a five percent tax on natural gas drilling, which would raise an estimated $1 billion annually, most of which Wolf would direct towards education funding. But there’s no way his math works without raising other taxes in a big way as well, almost certainly including the state income tax.

Wolf’s a Democrat, and the state is facing a big deficit, so you can expect that his proposed net increases will be bigger—probably a lot bigger—than his proposed tax cuts. But in making cuts to corporate taxes and property taxes part of the mix, Wolf is muddying up the equation for Republicans. A lower corporate tax rate is going to appeal mightily to business, and reduced property taxes are a dream for a lot of conservatives in Harrisburg. It’ll be extremely interesting to see how united, or fractured, the GOP response is to his pitch.

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