New Pa. budget has increase in cigarette tax of $1 per pack

Associated Press

HARRISBURG, Pa.

Lawmakers on Wednesday approved a $1.3 billion election year revenue package that hinges on a $1-per-pack cigarette tax increase to balance the state’s deficit-riddled budget and avert a lawsuit and a bond downgrade.

The hard-fought revenue package was split between tax increases and one-time infusions of cash, including a $200 million loan from a state medical malpractice insurance fund. A new sales tax on internet downloads will contribute money, as could an expansion of casino gambling.

It is perhaps the most significant election year tax increase in decades in Pennsylvania.

However, it is dramatically smaller than the $2.7 billion tax package that Democratic Gov. Tom Wolf had sought from the Republican-controlled Legislature in an effort to wipe out a long-term deficit and close huge disparities between poor and wealthy school districts.

And though it does not put to bed the state government’s long-term deficit or do much to narrow school disparities, Wolf’s numerous concessions helped avert a second straight prolonged and damaging partisan stalemate.

On Wednesday evening, Wolf signed the package, hammered out during weeks of negotiations, to wrap up his second budget since he became governor in 2015.