The Five Boldest Parts of Tom Wolf’s New Budget
Gov. Tom Wolf unveiled a big, bold budget proposal on Tuesday, just as expected. It has a little something for everyone to love and hate. (You can read Wolf’s full address, and see what Twitter has to say about the plan, here.)
Here are the highlights:
1. Increase Education Funding Statewide by $1 Billion
Delivering on his No. 1 campaign promise, Wolf’s budget would boost education funding by a total of $1 billion next budget year — if you combine spending on early, basic and higher ed. That number is probably not a coincidence, given that Wolf campaigned on the idea that his predecessor, Gov. Tom Corbett, cut $1 billion in education funding. Corbett maintained that figure wasn’t accurate throughout the campaign.
The state’s basic education subsidy would go up by $400 million under Wolf’s plan. Special education spending would increase by $100 million.
“Our commitment to education is historic,” he says. “A great public education system will help Pennsylvania attract new businesses, retain talent, and grow the middle class.”
How much is Philly getting? The city’s school district would receive an extra $159 million in basic and special education spending under Wolf’s budget. That’s an increase of about 14 percent.
2. Raise a Whole Bunch of Taxes
Checking off another campaign pledge, Wolf is proposing a new, 5 percent extraction tax on natural gas in the Marcellus Shale.
He also wants to hike the personal income tax from 3.07 percent to 3.7 percent, increase the sales tax from 6 percent to 6.6 percent, jack up cigarette taxes by $1 a pack, and create new taxes on e-cigarettes and other tobacco products. Worth noting: He would raise the exemption for personal income taxes so that it would include a family of four making up to $36,000 annually.
Hey, you have to pay for schools and other programs somehow! But that’s hardly the only thing he wants to spend the new revenues on …
3. Cut a Whole Bunch of Other Taxes
In fact, Wolf would use much of the money from the sales and personal income tax increases to fund huge property tax cuts across Pennsylvania. His property-tax relief plan is worth $3.8 billion, and he says it would cut “the property tax paid by the average homeowner by 50 percent.”
In Philadelphia, Wolf’s tax relief plan would largely come in the form of wage tax cuts. The wage tax for residents would drop from 3.92 percent to 3.48 percent in 2017, and to 3.36 percent in 2020 — the lowest rate since 1976, according to the Wolf administration.
Wolf also wants to reduce the corporate net income tax from 9.99 percent to 5.99 percent in 2016, and phase out the capital stock and franchise tax as planned.
Essentially, Wolf wants to overhaul the whole dang tax code.
“If we are going to lead in the 21st century,” he says, “we can’t do it with a tax code that takes us back to some of the worst decisions of the last century.”
4. Raise the Minimum Wage
The minimum wage is currently $7.25 per hour. Wolf wants to raise it to $10.10.
“A full-time worker earning minimum wage makes about $15,000 a year. For a family with two kids, that’s below the poverty line,” says Wolf. “I strongly believe that nobody who works full-time should be forced to live in poverty.”
5. Convince Republicans to Sign Onto All of This
This budget is pretty crazy. (Whether it’s crazy in a good way or crazy in a bad way likely depends on where you fall on the political spectrum.) But perhaps the craziest thing of all is that Wolf is looking to persuade a GOP-controlled legislature to sign onto it. Granted, it’s got some goodies for Republicans — property-tax relief and corporate net income tax cuts, for instance. But it also relies on major increases in other taxes.
Wolf says, “I recognize that some of you won’t agree with all or parts of [the budget], and I recognize that we’re going to have a robust conversation. That’s how our democracy works. But if you don’t agree with my ideas, here is my request: Please come with your own ideas. It’s not good enough to just say no and continue with the same old, same old.”
Follow @HollyOtterbein on Twitter.