Wolf update

Here's the highlights of the tax package Gov. Tom Wolf has introduced for possible consideration on the state House floor as early as Wednesday.

Note that this is not necessarily the full revenue package the governor would be seeking to conclude a budget deal.

Administration officials said Tuesday they can't make that promise in the absence of a final agreement.

But it is evident that, by the administration's own math, that when the proposed property tax relief piece is factored into Wolf's proposal, there is not enough income to close what he has defined as the state's structural deficit and increase education spending to the level that Wolf wants.

So, even if this measure passes, expect continued discussion about increases in cigarette taxes, the bank shares tax, etc.

Wednesday's bill is, however, intended to represent the size and scope of any broad-based tax that would be needed, and the new severance tax on natural gas production that Wolf has long championed.

PERSONAL INCOME TAX

The rate for all wage-earners would rise from 3.07 percent to 3.57 percent, effective Oct. 1, 2015. On an annual basis, that 16.3 percent increase would take the tax for a person making $50,000 from $1,535, to $1,785.

Some low-income households would be shielded from the increase by an expansion of the state's special exemptions for the working poor.

At present, a family of four with two children does not pay any income tax if their income is less than $32,000. Wolf's proposal would raise that total tax forgiveness ceiling to $36,400.

It is projected to raise a net $1.316 billion in 2015-16, and just under $2 billion in 2016-17.

SEVERANCE TAX

Wolf would set a severance tax on natural gas produced through hydraulic fracturing in the state's Marcellus Shale region at 3.5 percent of the value of the gas extracted, plus 4.7 cents per thousand cubic feet of gas produced.

This tax, to take effect January 2016, would be on top of and leave untouched the current impact fee structure established during the Corbett Administration.

At present, Pennsylvania is the only gas-producing state in the Marcellus Shale region without a severance tax.

It is projected to raise $67 million in 2015-16, and $389 million in 2016-17. All of the revenues are to be used for education.

PROPERTY TAX RELIEF FOR SENIORS, DISABLED

More than $400 million of the income tax money would be steered into Pennsylvania's existing property tax rebate programs for senior citizen and disabled homeowners.

The Wolf Administration says this will allow the state to expand the program to deliver bigger rebates to more households, starting in the 2017-18 fiscal year.

Administration officials said that increasing the maximum rebates permitted to $2,000 in some cases would provide for the effective elimination of school property taxes for 331,000 households. At present, the rebate program zeroes out taxes for about 84,000 households each year.

The tax rebate program's expansion would also permit more households to apply for larger rebates by expanding the household income ceiling from $35,000 at present to $55,000.

Summaries provided by the administration Tuesday suggested that the more liberal income eligibility limits for the program means nearly 570,000 households could be eligible for the rebates, up from 360,000 served last year.