Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Budget Gap Plan Hatched by Gop Higher Taxes and Borrowing in Mix

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Budget Gap Plan Hatched by Gop Higher Taxes and Borrowing in Mix

Article excerpt

HARRISBURG - Working late Wednesday to close a $2 billion gap in the state's $32 billion budget, the Republican-controlled Senate began pushing a plan to tax drilling for natural gas and raise or impose new taxes on telephone, electric and gas services.

The severance and utility taxes would raise about $550 million. Also being considered was a plan that includes $1.3 billion in borrowing and a yet-to-be-determined method to expand gambling.

If the full Senate approves the latest proposal - a floor vote could come Thursday - it would set the stage for a political staring contest with GOP colleagues who hold a commanding majority in the House. In that chamber, Republican leaders have rejected proposals that include new taxes and have firmly said no to any proposal that includes a severance tax.

J.J. Abbott, spokesman for Democratic Gov. Tom Wolf, said the governor "commends" the Senate for its work, but he stopped short of endorsing it.

"Gov. Wolf believes all parties must quickly come together to bring this process to a close," Mr. Abbott said in a statement.

Steve Miskin, spokesman for the House Republicans, would say only: "We will have to see what they [senators] actually send us."

The Senate's plan would impose a new tax on natural gas extracted from the Marcellus Shale - based on volume and expected to rake in $100 million annually - on top of the so-called impact fee drillers currently pay on wells they drill.

The plan would also reinstate a 5.7 percent tax on natural gas bills, with $20 million of the money raised going to the state's heating assistance program for the poor; increase taxes to 6 percent from the current 5 percent on telephone service, including cellphones; and raise taxes on electric service to 6.5 percent from the current 5.9 percent.

The Senate proposal would also close a loophole that allows some online retailers to avoid imposing and collecting the state's 6 percent sales tax on goods they sell. …

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