HARRISBURG - Pennsylvania state government would reap $3 billion a year under Gov. Wolf's plan to expand a 6.6 percent sales tax to include transactions on 45 currently exempt categories of products or services - including cable TV, spectator sports, and nursing care, according to figures released Wednesday by his administration.
The calculations underscore how big a role the sales-tax expansion would play in the Democratic governor's plan to pump $3.2 billion a year into cutting school property taxes and providing $2 billion in new aid to prekindergarten programs and public schools over his four-year term. The plan, Wolf contends, would help level the education playing field and bring relief to poorer and higher-tax school districts after schools saw deep cuts in state aid under his predecessor.
He also argues that eliminating the exemptions would bring Pennsylvania's sales tax into the 21st century.
Removing the exemptions would be a bigger source of money than either Wolf's proposal to raise the sales tax rate by 10 percent to 6.6 percent and the income tax by 20 percent to 3.7 percent.
The exemptions he would remove are similar, if not identical, to the ones that Republican lawmakers have sought in recent years as they tried to find ways to cut school property taxes. However, those efforts have met with defeat repeatedly, running into opposition from advocates for business and the poor, and certain lawmakers who do not see real estate levies or school funding as front-burner issues in their districts.
The biggest exemptions Wolf proposes to remove include a wide variety of recreational pursuits: fitness and sports centers; tickets to amusement parks, spectator sports, movies, and performing arts; and cable-TV fees.
Purchases of nonprescription drugs, candy, and gum would be taxed, as would personal services - including nursing care, counseling, and hair care. Fees for lawyers, consultants, architects, and real estate agents also would be taxed.
The plan will need approval by the Republican-controlled legislature, where some leaders are willing to consider a state tax increase for dollar-for-dollar property-tax cuts but are circumspect about increasing taxes to pay for pension obligations and state programs.