Buyers’ Demand
Investors have taken note, demanding 0.41 percentage point of extra yield to own 10-year Pennsylvania securities instead of benchmark municipal debt, data compiled by Bloomberg show. The difference is the most since at least January 2013 and is greater than the spread on California bonds, which carry a Standard & Poor’s grade one step lower, at A+.
S&P, Moody’s Investors Service and Fitch Ratings give Pennsylvania their fourth-highest marks.
Wolf’s use of tax increases is a “clear departure” from his predecessor, said Eric Kim, Fitch’s director of U.S. public finance in New York.
Wolf, who was chairman of a family-owned business that supplies kitchen cabinets, told voters he’d boost education funding through a severance tax on natural-gas production, a move that Corbett opposed. Jobs in the industry almost doubled in the four years through June 2014, according to the Department of Labor and Industry.
Wolf’s campaign received money from Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP.
Wolf’s Shift
The governor’s $29.9 billion budget would also shift education funding from property taxes to the sales and income levies. He’d increase the sales tax to 6.6 percent from 6 percent, where it’s been since 1968, and the income tax to 3.7 percent from 3.07 percent, while reducing a business-income levy. Average homeowners’ property-tax bills would drop by half, or $1,000.
“To create jobs that pay, schools that teach and government that works, we have to do things differently,” Wolf said in his budget address.
Jeff Sheridan, a Wolf spokesman, said previous Republican bills to reduce property taxes form the basis for the governor’s proposal.