Pennsylvania Governor Tom Wolf says that he has abandoned his call for an increase in the personal income tax rate in the interest of timely passing a FY 2017 state budget.

According to the governor's Facebook page, Governor Wolf stated in a radio interview that "he believes we can balance the budget, provide an additional $250 million for basic education, and include $34 million to address the heroin crisis without raising the Personal Income or Sales Taxes."

On Sunday, July 10, 2016, the governor stated that he would allow the $31.5 billion compromise general appropriations bill to pass without his signature if the state legislature fails to pass the revenue bill to fund it by the deadline of midnight on July 11, 2016.

The unfunded general appropriations bill became law on July 12, 2016 when the deadline passed without legislative action. The legislature returned to capitol on July 13 with plans to pass the revenue bill.

Governor has called for tax increases for last two years

As we reported in Tax Alert 2016-375, Governor Wolf's proposal for the FY 2017 budget called for an increase from the current personal income tax rate of 3.07% to 3.4%, effective retroactively to January 1, 2016.

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