Wolf willing to discuss budget that doesn't require sales, income tax increases to balance

Gov. Tom Wolf said Friday that he would listen to ways to wipe out a long-term deficit and increase education aid without raising sales or income taxes, but he also insisted that the deficit be addressed honestly and without what he calls "smoke and mirrors."

Wolf's comments to reporters, following a speech to the Pennsylvania American Legion convention at a downtown Harrisburg hotel, came on the 10th day his administration is without signed budget legislation that gives it the authority to pay all of its bills in the new fiscal year.

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A key sticking point identified earlier in the week by Senate Majority Leader Jake Corman was Wolf's insistence on an income or sales tax increase to support state spending. Asked if he could get what he wanted for education and the deficit without raising income or sales taxes, Wolf, a Democrat, said he was not sure.

"I don't know how you do that, but I'd like to see," Wolf said. "There might be some ways and I'd be happy to work with ways" to do it.

He added that budget-makers must be honest about a long-term budget deficit that has prompted rating agency downgrades and left Pennsylvania's creditworthiness in the nation's basement.

"We can't use smoke and mirrors that we've used in the past," Wolf said. "We've got to get to it in a real way to a balanced budget. I'm willing to talk about things, but I haven't heard anything yet."

Negotiations were at a standstill Friday, with no new talks scheduled.

The budget that Wolf inherited from former Gov. Tom Corbett and the Republican-controlled Legislature was balanced on more than $2 billion in one-time stopgaps, such as payment delays or transfers from off-budget program funds. All three major credit rating agencies — Fitch Ratings, Moody's and Standard & Poor's — downgraded Pennsylvania's debt after Corbett signed last year's budget bill.

On June 30, Republicans sent a $30 billion, no-new-taxes budget bill for the new fiscal year to Wolf after negotiations stalled. Wolf promptly vetoed it, saying it felt short of his priorities and used unacceptable stopgaps that would worsen the deficit to more than $3 billion next year.

Corman did not rule out other kinds of tax increases, and he said Tuesday that Republicans are open to helping Wolf meet his goals, within reason.

Wolf's proposal for a $31.6 billion budget package is designed to wipe out the long-term deficit and send about $800 million more to public schools, universities and early childhood education programs. It would require higher taxes on income, sales, Marcellus Shale natural gas drilling, banks and sales of tobacco products, while cutting corporate taxes.

Wolf also wants approval of a $3.2 billion property-tax cutting package that would rely on higher income and sales taxes. Movement on that has stalled in the Senate.