State lawmakers question drilling tax, wage hike as budget hearings begin


HARRISBURG — Three weeks of state budget hearings kicked off Tuesday with legislators scrutinizing Gov. Tom Wolf’s proposals to enact a new tax on natural gas drilling and raise the minimum wage.

Members of the Senate and House Appropriations Committees questioned officials with the state Independent Fiscal Office about the Democratic governor’s calls to raise the minimum hourly wage to $12 from $7.25, the federal level, and his plan to impose a 6.5-percent severance tax on natural gas drilling, an industry that has provided an economic boost to pockets of the state.

House Appropriations Committee Chairman Stan Saylor, R-York, said that taxing a particular industry could lead to the loss of jobs to other states.

“We have to keep in perspective our economy, what taxes we put in place and how it affects job creation here in the future,” he said. “We have a spending problem, not a tax problem.”

Mr. Wolf earlier this month proposed a $32.3 billion spending plan for the next fiscal year that would use expenditure cuts and agency consolidations to close much of Pennsylvania’s budget shortfall, which current projections say could swell to more than $2.8 billion in the next fiscal year if not addressed. Unlike his past proposed budgets, the latest one does not call for increases in the state sales and personal income tax rates.

Republican legislative leaders have criticized aspects of Mr. Wolf’s plan — like the natural gas severance tax, which he has called for before — but in general have sounded more receptive than in previous years.

Rep. Joe Markosek of Allegheny County, the ranking Democrat on the House Appropriations Committee, even suggested Tuesday that Mr. Wolf’s plan was like one a Republican might offer.

“We are looking at a Republican-style budget proposal from a Democratic governor,” he said.

The possibility that actions by Congress to change the Affordable Care Act could affect the state budget came up when Rep. Stephen Kinsey, a Philadelphia Democrat, asked if the office had looked at the issue.

Deputy director Mark Ryan said that if the cost-sharing between the state and federal governments for people insured through Medicaid expansion were to be changed from a rate under the Affordable Care Act to the standard federal-state split, it would cost Pennsylvania about $2 billion more, if those people remained covered.

The House panel also heard from the Department of Revenue and the Department of State, while the Senate Appropriations Committee heard from the Independent Fiscal Office and the Treasury. Both panels are expected to hear later this week from officials of the State System of Higher Education and the Attorney General’s Office, among others.

Budget negotiations typically intensify in June, ahead of the start of the state’s fiscal year July 1.