StateOfPennTwo budget proposals are now under consideration for the Commonwealth’s June 30th fiscal year deadline – one from Governor Wolf and one authored and passed by House Republicans that is now in the State Senate awaiting revision. All indications are the Legislative Leadership and Governor are working diligently to avoid another prolonged impasse and these separate budgets proposals will be central to negotiations and discussions on a host of other items such as further liquor privatization, increased education funding, pension reform and expanded gaming.

In fact, the House and Senate Republican majorities have already started to introduce and position legislative vehicles on some of the above items in advance of budget negotiations. The Senate Republicans are planning a pension reform measure. House Republicans have been moving at least two liquor privatization bills, HB438 and HB991 that would potentially include come revenue. HB 438 allows hotels and restaurants to sell up to 4 bottles of alcohols, and HB 991 expands the amount of retail stores allowed to sell wine and spirits to 2000. There are also several proposals to expand gaming in the Commonwealth; namely legalizing video game terminals, sports wagering and internet gambling. Other revenue streams up for negotiation include the Governor’s plan to charge for State Police services and increasing the Minimum Wage. The aforementioned bills could all be part of final budget negotiations.

However, it is unclear if legislative leadership will also agree to a tax increase, nevertheless have the votes in their respective caucuses to fully pass one. If so revenue possibilities include an increase to the Personal Income Tax, an increase and/or expansion to the Sales Tax, a 6.5% severance tax on natural gas extracts, changes to Corporate Net Income (CNI) Tax rate, expansion of the insurance premiums tax to most previously exempt insurance entities, and elimination of exemptions in the sales and use tax for specialty software and computer services, prepared food sold to airlines, aircraft maintenance and repair and business storage.