Five Things to Know About Gov. Wolf’s Budget Proposal

For one thing, it doesn't include any broad-based tax increases.
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Gov. Tom Wolf delivered his annual budget address in Harrisburg earlier today, presenting a $32.3 billion spending plan that would work to close the state’s nearly $3 billion deficit largely through significant cuts to government agencies and reforms that would eliminate “corporate loopholes.”

The changes would save taxpayers more than $2 billion, according to Wolf, a first-term Democrat who is up for reelection next year. But Wolf still wants to accomplish the goals he’s long sought by funneling more money into schools and programs that fight the state’s opioid crisis.

Here are five things you should know about the governor’s budget proposal.

1. The proposal doesn’t include any broad-based tax increases.

In a move to appease the Republican-controlled legislature, Wolf will not push to increase either the sales or the income tax this year.

In the past, Wolf’s proposed tax increases have led to lengthy budget impasses and harsh pushback from Republicans. The proposal’s lack of broad-based tax increases could help to eliminate some disagreement and speed up the budget-approval process, but Wolf and the legislature will still have to cooperate to figure out how the state will generate revenue without the tax increases.

2. Wolf’s top priority is still education – and he still wants to spend on it.

Wolf’s proposed budget would invest more than $200 million in schools — including a $125 million increase in spending for basic and special education, a $75 million increase for early childhood education, and an $8.9 million increase for higher education.

In addition to spending on education, Wolf also wants to spend $10 million to increase accessibility to life-saving medications for drug-overdose victims. The governor has long sought to relieve the state’s opioid crisis.

3. Wolf wants to make significant cuts to government agencies.

In a move likely made to appease legislative Republicans, Wolf announced plans for “the largest cuts to, and consolidations of, government bureaucracy in our history.” The governor proposed a $2 billion spending cut for government agencies.

According to the Inquirer, that includes possible mergers between the Department of Corrections and the state’s Board of Probation and Parole, which together would become the new Department of Criminal Justice, as well between the Departments of Health, Aging, Human Services and Drug and Alcohol Programs, which would simply become the Department of Health and Human Services. Wolf also wants to sell and lease underutilized state-owned property, the newspaper reports.

4. Wolf will try (again) to pass the natural gas drilling tax.

Wolf proposed a 5 percent gas extraction tax in 2015 as well as a 6.5 percent tax in 2016 – and neither passed. He’s again proposing a 6.5 percent tax on fracking, and it’s not yet clear how this will go over with state Republicans, especially considering President Donald Trump’s efforts to loosen environmental regulations and appease the country’s energy companies.

Pennsylvania is the only major natural gas-producing state that doesn’t tax natural gas drilling companies on their extractions. Wolf’s administration estimates that the tax would bring in roughly $293 million in its first and year and about $500 million by 2020, according to Billy Penn, and the funds would reportedly be used “to generate new revenue to support future education investment while sustaining growth and maximizing economic gain from the commonwealth’s natural resource.”

As PennLive pointed out, Wolf wants to move away from the impact fee enacted by former Republican Gov. Tom Corbett in 2012 and toward a severance tax that could work to increase revenue from natural gas companies drilling in the Marcellus Shale. Some Republicans support a severance tax, according to Billy Penn, but the Marcellus Shale Coalition said in a statement released today that Wolf is “saddling the industry with higher costs.”

5. The budget proposal includes a likely contentious tax on small towns that rely on state police.

Wolf is proposing that small towns that rely on coverage from Pennsylvania State Police should pay a fee of $25 per person, the Inquirer reports. According to Wolf’s administration, more than 65 percent of municipalities in Pennsylvania rely on state police. The tax could bring in $63 million, Wolf’s administration claims, but it will likely receive considerable pushback from rural residents.

Follow @ClaireSasko on Twitter.

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