Local business and education leaders and elected officials weighed in on Gov. Tom Wolf's proposal Tuesday to increase the state income and sales taxes to help offset school property tax rates.

Wolf proposes increasing the personal income tax from 3.07 percent to 3.7 percent, and the sales tax by 10 percent, from 6 percent to 6.6 percent to generate an additional $3.9 billion in revenue, most of which would be used to reduce property taxes by 2016.His plan would also levy sales tax on 45 items not currently taxed, including newspapers, candy, textbooks and caskets.He spoke about the increases as he unveiled his $29.8 billion 2015-16 state budget.That plan sounded familiar to Kathy Henderson, director of Economic Development for the Carbon Chamber and Economic Development Corporation."That's the exact same plan that (state Sen.) David Argall has to reduce school property tax," she said."I'm all for it, but I need to study it more to see how it would impact citizens and businesses. I do support SB 76. It's the best plan I've seen so far to eliminate property tax."But Henderson has reservations about Wolf's plan."He's still giving school districts the authority to raise property taxes. Our citizens are taxed enough. We're just pulling out of the recession now in Pennsylvania. Things are looking up. If his proposal is going to encourage more business to come in to the state and existing businesses to expand, that's not a bad plan. But I'm taking a wait and see attitude right now until I can study it further."A local business owner is dead set against Wolf's proposal, saying it would cripple an economy that is struggling to recover from the 2008 recession."I'm against it. I see a lot of waste out there. I think it's really a matter of managing what you have better," said Marshall Walters, owner of Architectural Polymers in Palmerton."I think its just a bad idea all around," he said. "From a business standpoint, any time you raise taxes it affects business. This is just the wrong place and the wrong time to do it."Walters said the sales tax increase, which would apply to materials and equipment he would need to buy, would have to be passed along to his customers."From a small-business person's point of view, we have to undergo same regulations as everyone else. We have to pay for upgrades to meet those regulations, and now they want to raise the sales tax we have to pay when we buy the materials," he said."But did we really expect anything different? I didn't."Party lines drawnElected officials responded to the Democratic governor's proposal as expected, along party lines.Argall, R-29, said Wolf's proposal may well snowball into higher taxes all around."Today, the governor proposed a permanent increase of sales and income taxes for a temporary reduction in school property taxes. In a few years, those property taxes will grow and taxpayers will be left with higher income taxes, higher sales taxes and again, high school property taxes," he said."I don't believe that the governor's plan by far, the largest tax increase ever proposed in state history is a realistic solution. Instead, we have to address major cost-drivers in state government and completely eliminate the unfair, 1834-model school property tax," Argall said.His Democratic colleague, Sen. John Yudichak, D-14, called Wolf's proposal "an honest fix.""Gov. Wolf, true to his word, began the budget conversation in bold, unconventional fashion by refusing to rely on political gimmicks and proposing an honest fix to the massive budget challenges facing Pennsylvania," Yudichak said."Gov. Wolf proposed a comprehensive modernization of the tax code that would end loopholes for special interest groups; make Pennsylvania businesses more competitive; and will finally deliver on the promise of significant property tax relief for every senior citizen and every homeowner in the commonwealth."While there will compromise and negotiations over each budget proposal, Gov. Wolf deserves a great deal of credit for awakening Harrisburg from its four year slumber in the land of political gimmicks and fiscal enchantments," he said.'Disappointed'Sen. Mario Scavello, R-40, called the proposal "disappointing.""I am open to working with the governor and my colleagues in the Senate and House to develop a responsible state budget that meets the needs of the commonwealth while making government live within its means. However, I was disappointed to hear the governor's call to drastically increase taxes on families and employers to pay for more government spending," he said."His initial proposal would raise taxes by $12 billion over the next two fiscal years about $1,000 for every man, woman and child in Pennsylvania. His personal income tax increase alone would reduce the take home pay of the average Pennsylvania family by more than $300.Scavello said he would continue to push for inaction of the Property Tax Elimination Act, of which he is a prime sponsor.State Rep. Jerry Knowles, R-124, said his concern lies with those Pennsylvanians whom he believes would be hard-hit by the tax increases."As always, my main concern is controlling state spending, and ensuring that every taxpayer dollar is being spent wisely," he said. "I have residents who are having a hard time making it through the winter, and who are struggling to pay for the essentials heat, medicine and food. With realities like this, I can't imagine the governor raising my constituents income tax and sales taxes, when so many can barely afford food or to heat their homes."State Rep. Doyle Heffley, R-122, said he's concerned about the impact of the increases on working families."As the legislature and administration work toward a budget that provides relief to property owners, increases opportunities for students and makes it easier for businesses to operate and hire employees in the commonwealth, we must keep in mind that we cannot achieve these goals simply by overtaxing our residents and spending more money."To protect taxpayers, any property tax reduction plan must include a dollar-for-dollar tax shift so that it does not produce a net tax increase. I look forward to working with the governor to find common ground on a solution that would provide meaningful property tax relief for our residents," he said.School formula neededRep. David Parker, R-115, said the state needs a school funding formula.Pennsylvania is among the few states that do not have a set method to determine how much money districts receive."The biggest obstacle to reforming school property taxes is the 20-year-old 'hold harmless' provision in the state Education Code which states that no school district can receive less state funding than the year before and is based on census results from 1991," Parker said."While it is encouraging to hear the governor acknowledge we have a school property tax problem in Pennsylvania, his solution of raising taxes on the middle class in return for pennies in property tax relief won't really help those struggling to keep their homes out of foreclosure."Under Wolf's budget proposal, the state's Personal Income Tax and sales tax would both be increased dramatically to pay for billions of dollars in new spending. Reforming the education funding formula so that growing school districts get the funds needed to educate their influx of new students and passing real property tax elimination are the basis for true education funding reform," Parker said.One local school chief agrees a funding formula is needed.Panther Valley School District Superintendent Dennis Kergick said political parties will have to work together to put the plan into action."It's probably workable, but I don't know if the cooperation will be there to bring it forward," he said.Kergick said one of the biggest problems is that the state lacks a school funding formula. Still, he believes Wolf may be on the right track."If he could lower the property tax, people would love that. But I think we've all heard the talk before about raising the sales tax."Hard lookDavid Baldinger, spokesman for the Pennsylvania Coalition of Taxpayer Associations, including 84 grassroots groups across the state, urged people to take a hard look at Wolf's proposal."Gov. Wolf's property tax relief plan is simply more smoke and mirrors that, in the end, accomplishes nothing. As long as school property taxes are allowed to increase unchecked there is no 'relief' plan that will work," he said."Replacement funding sources like the sales and income tax increase at one-third the rate of increase of the school property taxes; you might see a few years of help but, in the end, the property tax will go right back to where it was before but with the new replacement taxes to pay. This is not a solution to the property tax crisis."Rep. Julie Harhart, R-Lehigh/Northampton, said, "Anytime I hear a proposal to raise taxes on hard-working Pennsylvanians, I grow concerned. Increased taxes are not something most Pennsylvania families can afford.