The framework is there for a new Pennsylvania budget, months after it should have been passed in mid-summer, but the devil is in the details, especially as it relates to the final increase in the sales tax in Philadelphia. If approved as is, Pennsylvania would have the second highest state sales tax, after California, jumping from 6% to 7.25%.
It is still subject to negotiations, but the options include giving Philadelphia the ability to use some of the new revenue raised by a statewide sales tax increase intended for property tax reductions, and swap them to mitigate the city sales tax hike.
Let me get this straight…
Philadelphia has been mismanaged for decades (by Democrats), to the point that they have a higher sales tax than the entire state to make them a couple of extra bucks for squandering. A point and quarter increase would get them to 9.25%, tied for third nationally as the highest.
This is apparently one tax hike the Democrats don’t like.
So instead, people in the other 66 counties that aren’t nearly as screwed up, kick in a forecasted $2 billion dollars – some of which (who knows how much) then goes BACK to Philly to help them do what? Cut their sales tax rate?
When Philly gets their tax break (really), THEN we get to help pay for schools. But not really. Because every year the PSERS pension benefits increase OBLIGATING school districts to raise property taxes to balance their budgets. (Thanks Tom Ridge and early 2000s Harrisburg!)
So we end up with higher sales taxes and schools still begging for help.
The only sensible idea floated lately was that all new hires would be getting a 401K style program with small employee contributions. You know, just like everyone not in a government job. But even that’s only a baby step. The employees in the state retirement system are still working! So their contribution obligations wouldn’t change, and the whole program is massively underfunded. Even selling the liquor stores probably wouldn’t fill that hole in.
By the way, this new 7.25% tax rate would be second only to California.
Hello tax-free Delaware shopping (for those of us close enough or passing through).
Are these guys for real with this?