Pennsylvanians may see a little bit more taken out of their paychecks if a state personal income tax hike is approved.

Pennsylvanians may see a little bit more taken out of their paychecks if a state personal income tax hike is approved.
Gov. Ed Rendell recently proposed raising the state income tax rate to 3.57 percent from 3.07 percent in order to patch a $3.2 billion state deficit incurred this budget year due to a sharp decline in tax revenues.
The increased rate would fetch an additional $208 a year, or $1,485 total, from an individual making $41,600. The half percent alone would bring in an estimated $1.5 billion a year in revenue, perhaps offsetting state program cuts and shoring up some funding that trickles down to county-level governments and school districts.
A few Wayne County residents surveyed by The Wayne Independent in downtown Honesdale agreed with the merits of the governor’s plan in light of the U.S. recession.
“I would pay the $20 bucks extra,” said Paul Kaulfers, 47, of Honesdale Borough, adding he is concerned that curbing state spending and programs would result in more lost jobs.
“If it means that somebody is going to lose their job and make it (the recession) worse, it doesn’t make sense,” he said. “I wouldn’t want to lose my job for $20 bucks.”
Texas Township resident Mike Smith expressed a similar sentiment.
“That’s a logical reasoning behind it,” said Smith, 48. “There’s so many people out of work.”
Karen Reynolds, of Honesdale Borough, took a slightly different track, noting that if the state receives more revenue from a higher personal income tax, the government should at least maintain or better its services.
“Don’t make us pay a half percent more and give us much less,” said Reynolds, 52. “If they’re giving you something back, then it’s OK.”
The state funds a myriad of programs including: local economic development, school districts, health and human services, libraries, and many more with varying levels of funding on a year-to-year basis.
Others, however, disagreed saying that a couple states do not even have a personal income tax and that  also has a slew of other revenue generators, including sales and property tax.
The Democratic governor’s pitch is facing stiff resistance from state Republicans.
Both parties are also approaching a June 30 deadline - the end of state’s fiscal year when funding should be secured. Otherwise, state employees may face payless days, along with a loss of public services, among other concerns.
State Senate Republicans offered a budget for the 2009 - 2010 fiscal year that would cut $2 billion from the governor’s $29 billion proposal, while avoiding a state income tax hike.
The hike is being offered as temporary measure, removed after three years as it is based upon when the recession lifts and tax collections return to normal levels.
Republican State Sen. Lisa Baker, who represents Wayne County, is unequivocally against hiking the personal income tax to fix the state’s deficit crisis, said a spokesperson.
“Her thought is that this isn’t the right time to be raising taxes,” said Jennifer Wilson, the senator’s spokesperson, in a phone interview with The Wayne Independent on Wednesday. “It’s not good for the economy. We don’t have anybody beating down our door to raise their taxes.”
Wilson added that the senator is seeking a budget that identifies “wasteful spending” and cuts some state programs and funding where necessary.
Republican State Rep. Sandra Major, who represents northern Wayne County, also said she would not support raising the state personal income tax.
“We need to be responsible in the cuts we make and move forward without a tax increase,” said Major in a phone interview. “Unfortunately what I see a lot is redundancy in (state) programs. There are certainly areas in the budget that can withstand the cuts.”

State Personal Income Tax Table:

Income: $20,800 @ 3.07 percent = $638 (state taxes owed)
                $20,800 @ 3.57 percent = $742
                $41,600 @ 3.07 percent = $1,277
                $41,600 @ 3.57 percent = $1,485