| HARRISBURG, Pa.
HARRISBURG, Pa. Feb 7 Pennsylvania Gov. Tom
Wolf on Tuesday proposed a $32.3 billion state budget for fiscal
2018 that seeks to reduce an estimated $3 billion structural
deficit through $2 billion in spending cuts and $1 billion in
His plan would not, however, raise the personal income or
state sales taxes, proposals in his previous budget addresses
that failed after resistance from the Republican-controlled
"I'm offering a budget proposal that represents a
responsible solution to our deficit challenge, and a different
approach from the way things have been done in Harrisburg for
almost a generation," said Wolf, a Democrat, in his address to
His revenue enhancements include a removal of special
interest exemptions to the sales tax, including for pre-made
airplane meals sold to airlines, aircraft maintenance and
repair, and business storage.
Wolf also hopes to get $200 million from a leaseback deal
for the Pennsylvania Farm Show Complex & Expo Center in
Cuts target different areas, including a $31 million annual
appropriation for the University of Pennsylvania School of
Veterinary Medicine and $50 million of student transportation
reimbursements made possible by lower gas prices.
Combining four state agencies into the Department of Health
and Human Services will save another $91 million.
Republicans said they appreciated Wolf's attention to
cutting costs but questioned proposals for one-time revenues and
the apparent lack of solutions for the state's underfunded
public pension system, growth in Medicaid spending and long-term
"This proposed budget falls short of addressing the real
issues in state government," said Senate Majority Leader Jake
Corman in a statement.
Wolf also suggested imposing a $25 fee per resident in
municipalities that use the state police for local law
enforcement. Currently, they are paid for through the gasoline
In addition, he proposed lowering corporate taxes beginning
on Jan. 1, 2019 to 8.99 percent from 9.99 percent, currently the
second-highest rate in the country.
Budget Secretary Randy Albright said in a briefing with
reporters that the lower tax rate would be offset by the
elimination of the so-called Delaware loophole - when
Pennsylvania corporations avoid corporate income tax by setting
up a holding company in Delaware, which does not have the tax.
Wolf's spending plan is $571 million, or 1.8 percent, above
the current budget and must be approved by lawmakers before the
July 1 start of the fiscal year.
(Reporting by David DeKok in Harrisburg; Editing by Hilary Russ
and James Dalgleish)