DN Editorial: Compromise or curse?

THERE WAS A SENSE of relief last week when Gov. Wolf and Republican legislative leaders announced a tentative agreement on a new state budget.

Our first reaction was, better late than never. The state had gone five months without the ability to spend because of the stalemate in Harrisburg, forcing school districts to borrow money to keep operating and social-service agencies to furlough workers.

Details about the deal are hard to come by because it is not completely worked out, though the governor has said he is hopeful a budget bill can be signed before Thanksgiving.

We do know that the deal calls for an increase in the state sales tax and also includes additional money - in the range of $350 million to $400 million - for public schools.

We also know that the tentative deal does not - repeat does not - include a tax on natural-gas extraction that Wolf made a centerpiece of his campaign.

Both sides portray the deal a less-than-perfect compromise where both sides get the political equivalent of half a loaf.

We wish we could cheer, but we need more information before that happens.

For one thing, Philadelphia takes a real hit when it comes to the increase in the sales tax. In most counties, it will mean an increase in the sales tax from the current rate of 6 percent to 7.25 percent. But Philadelphia's sales tax already is at 8 percent because it includes a two-point add-on for local purposes. This plan would raise the sales tax rate in the city to 9.25 percent, among the highest in the nation.

This puts city businesses at a distinct disadvantage over New Jersey, where the sales-tax rate is 7 percent, and especially Delaware, which has no sales tax.

The deal, as announced, states than the estimated $2 billion that will be raised statewide from the sales-tax increase is to be used to lower local property taxes. That's a worthwhile goal, but we have to wonder: How can we afford that when the state is facing a $2 billion deficit this year?

Raising the sales tax by $2 billion and then turning around and using the money for property-tax relief does nothing to solve the state's financial problems. Those dollars should go to putting the state back on sound financial footing.

Finally, there is the issue of fairness. The sales tax is the most regressive tax there is, especially when it comes to lower-income workers. This deal asks the workers of Pennsylvania to dig into their own pockets to pay $2 billion more in taxes while it gives a free pass to the billion-dollar corporations that drill for gas in this state.

One other question remains: No one is quite sure how much the Philadelphia School District (or any district in the state) will get from the new budget. If it's not enough to ease the district's chronic financial woes, we have to ask: What good is it?

As the saying goes, the perfect is the enemy of the good. If we wait for a perfect budget deal, we may wait forever, with disastrous results.

But we would urge the Philadelphia delegation in Harrisburg not to sign on to this deal until serious questions about its effect on the city are answered.