PA Gubernatorial Front-Runner Tom Wolf:
I Am More Than My Money
"I know how the sausages are made."
It’s easy to talk about Tom Wolf’s money.
Polls show Wolf — a former state revenue secretary, and head of the family kitchen cabinet-making business — has surged to the top of the field of Democratic candidates running for governor in Pennsylvania this year, a surge that has been fueled by the candidate’s relentless television advertising, which in turn has been fueled by Wolf’s personal fortune.
Wolf doesn’t quite see it that way. Instead, he believes that his appeal to voters lies less in the money he’s using to tell his story and more in the story that he tells.
“I think what actually is distinguishing me from the others in the race is my story,” he says. “I think what people like is that I come from a small town. I was in the Peace Corps. My two daughters went to the local public schools. I’ve been married to my wife for 39 years. I contribute 20-30 percent of my net profit back to my workers. I built a business, actually twice. I have a PhD from MIT. I drive a jeep. I think they like the story and that’s what seems to be driving my campaign.”
Wolf talked this week to Philly Mag about his campaign:
You’ve been praised as a critic of the “ripoff game” in economic development, the ability to rip a business from one state and have it locate here. Instead, you’ve advocated creating more manufacturing jobs in Pennsylvania. One of your key strategies for doing that is a cash-back program to companies that grow their payroll by at least $1 million. Do you risk getting into the “ripoff game” with that kind of strategy?
There are two things that distinguish, I think, my proposals from other proposals. First of all, they would have to have a public purpose test. The question is “Does this intrusion into the market actually make Pennsylvania better? Does it make the lives of Pennsylvanians better? Does it make communities better?” And if the answer is yes, then I am for, in certain limited circumstances, priming the pump. The other thing that distinguishes my proposals, including one you just mentioned, is that I would introduce some accountability. Too often these kinds of programs lack the accountability that I think they need. Do they, in fact, create the jobs that were promised? So, my jobs plan not only suggests that the commonwealth would be willing to offer cash-back for companies creating good jobs, but that we would hold those companies accountable.
The second question about your cash-back program: Does that put too much emphasis on hitting home runs? Because there are smaller entrepreneurs and manufacturers who might succeed with some incentives but can’t grow quite at that rate.
There’s some small businesses that might be under the radar screen here and I’d certainly be happy to look at the details. But $1 million in payroll sets the bar fairly low and I think we would want to make sure we’re creating sustainable, long-term, good paying jobs with great benefits and at a level that would help Pennsylvania. So that $1 million threshold was the one I chose. You make a good point. That might be something that I should take a look at.
Let’s turn to the Marcellus Shale for a second. You, like other candidates on the Democratic side, want to impose a severance tax on gas extracted from the shale. Even relatively anti-tax states such as Oklahoma have such a tax which kind of leaves Pennsylvania relatively lonely in failing to exploit gas as a state revenue source. There’s a recent recommendation from economists that Pennsylvania join up with neighboring states in imposing a common tax rate on the extraction so that the industry can’t play states against each other. What do you think of that idea?
I’m not familiar with that idea. Here’s my proposal: Put a 5 percent severance tax on the extraction of natural gas. And the reason for that would be to make sure that we actually share in the benefits of having this resource beneath our feet. But also that we use some of the money that we generated from such a tax to do it well and make sure we’re doing it as environmentally responsibly as we possibly can.
Now let me just make sure we’re all on the same page with an extraction tax. You point out Oklahoma, actually Texas, Alaska, other states have … almost every other state with natural resources has an extraction tax. What companies typically do is fold that into the price of their product and then it is paid for by whomever consumes that product. In the case of natural gas, since so much of this natural gas market is in New England and New York and other places, most of that would be paid for by non-Pennsylvanians.
The fact that we don’t have a severance tax right now, in Texas they have a 7-and-a-half percent severance tax, means that we’re paying other peoples’ severance taxes. We’re paying the taxes that get embedded in the prices of those products extracted from those states while no one else helps us pay for the natural resources that are extracted from our state. That means when you put a gallon of gasoline in your car, you’re paying for some of the taxes from Alaska’s North Slope that Exxon Mobil has folded into the price of their product. You’re paying that and no one’s paying Pennsylvania’s taxes.
Education is another top issue, of course. Thanks to a combination of federal and state cuts, funding declined by a billion dollars after Tom Corbett took office. You proposed to restore those cuts. You also proposed a formula that would make distribution of the state’s education dollars more equitable than it is now. On one level, there’s nobody who’s against that idea because even Governor Corbett has said that a new formula is needed. On the other hand, it seems to be the most popular idea that never seems to happen. What’s obstructing the creation of an equitable funding formula, and how do you build one to overcome the hurdles?
Well, it seems to me that some fairly narrow political calculations are keeping a fair funding formula from taking root as well as, in part, the inability of the state at this point to adequately fund such a formula. So, it would take some conversation.
But I think that the general idea is that in the interest of fairness, we need to come up, and do what most other states have done, and that is come up with a way to fund schools that reflects the true needs of the different school districts rather than some formula that is completely detached from the actual needs. So, I’m not sure what the stumbling block is to the implementation of the fair funding formula other than the lack of adequate funds in the minds of some, but it’s something we really need to do if we’re gonna have a good education system. It’s something we need to do if we’re gonna deliver on the constitutional promise of a fair and efficient education for all of our citizens.
We have to recognize that public education is something that matters to each of us. We pay for public education, all of us as citizens of Pennsylvania because each of us benefits from the education that all children receive, not just our own. I’m from York County, but I benefit from the education of children in Philadelphia or Pittsburgh or Erie get, because if they get a good education, I actually end up getting a benefit from that. We share in the responsibility for funding public education because we share in the benefits that a good public education system, a good education for all of our citizens, provides. We share in the responsibility for funding public education because we all share in the consequences of not doing it well. So, we need to find a way to do this, to fund our schools adequately and equitably as the saying goes and the fair funding formula is a big start towards that.
There are a lot of places where you do propose to invest. In education, as we just talked about, in incenting manufacturers, in creating transportation infrastructure, in expanding Medicaid. With the exception of what we discussed about the revenues from the Marcellus Shale though, I don’t see a lot of discussion from your campaign about how we’re going to pay for all that. There’s lots of investments to be made, how are we going to pay for all that?
Well, I did talk already about the extraction tax which would produce hundreds of millions of dollars just in the first year. I think there’s also rearrangement of priorities in education. If we look at the way we’re funding some cyber charter schools at this point, (former) Auditor General Jack Wagner a couple years ago said that would be worth $300 million plus right there. That gets you some way down the road to finding funding that we’re missing. Don’t forget [that] for a time I was secretary of revenue, so I understand the tax code. And I think if we, I was convinced then anyway, that if we broaden the tax burden, make it fairer, we could actually, I think at current tax rates, produce the revenues we need to do the things I think we need to do to make sure that we’ve invested everything we should to make Pennsylvania a great place.
The primary is, of course, about choosing a candidate who can best represent the party against the Republican incumbent in the fall. How are you different from — how are you better than — Tom Corbett?
I think people are hungry for someone they can trust and someone who actually has confidence and someone who has character and I think I have both of those things. When it comes to the general election, I am probably the best person to go toe-to-toe with whoever the Republican party puts up because I’ve actually walked the walk. I’ve actually been in business, that’s been my career. I’ve actually been in public service, so I even know how the sausages are made from the inside perspective. And I would love to talk to somebody about what we need to do in Pennsylvania to make this the economic dynamo it should be. So that people are here creating jobs, building careers, all the things I did in my life as a business owner and successfully.
I think I’m uniquely qualified to go toe to toe against whoever the other side puts up because I’ve actually done this. And when they pretend or try to speak for those of us who have built businesses, who have employed people and met payrolls, I could actually come right back and say “Actually, maybe some of the things you think work for business might not work as well.” I’ve done this. I’ve worked in the trenches. I’m a lifelong Democrat and everything I’ve done and seen in my business career has reaffirmed me as a Democrat. And I think that would be something that would be somewhat unusual in politics and state politics that would make me a good candidate.
Follow @JoelMMathis on Twitter.
Philly Mag is profiling and interviewing the major candidates for governor. In January, we profiled Allyson Schwartz. Last month, we interviewed John Hanger. This month we spoke with Katie McGinty. Stay tuned throughout the spring as we chat with other candidates.