Gov. Wolf challenges Republicans with his second state budget
February 10, 2016 12:28 AM
Chris Knight/Associated Press
Gov. Tom Wolf delivers his budget address for the 2016-17 fiscal year to a joint session of the Pennsylvania House and Senate Tuesday in Harrisburg. Behind him are House Speaker Mike Turzai, R-Marshall, left, and Lt. Gov. Mike Stack.
Chris Knight/Associated Press
Gov. Tom Wolf, center, delivers his budget address for the 2016-17 fiscal year to a joint session of the Pennsylvania House and Senate on Tuesday in Harrisburg.
By Karen Langley and Kate Giammarise / Post-Gazette Harrisburg Bureau
HARRISBURG — With his first Pennsylvania budget still unfinished, Gov. Tom Wolf on Tuesday delivered a combative second budget address, telling Republican legislators that if they won’t send him a sound proposal, they should find a different job.
After a year of division at the Capitol over Mr. Wolf’s first call to raise taxes and increase school spending and resistance to that call from the Republican legislative majorities, the scene Tuesday suggested neither side is about to budge. Mr. Wolf’s new budget proposal would raise the personal income tax from 3.07 percent to 3.4 percent, and it assumes the General Assembly will agree to additional spending increases this fiscal year and then more increases in the year beginning July 1.
Groans arose from the Republican side of the chamber at points during Mr. Wolf’s address, while Democrats applauded.
“If you can’t agree to the budget reforms I’ve proposed, then help me find a sustainable alternative,” Mr. Wolf said. ”But if you won’t face up to the reality of the situation we’re in, if you ignore that time bomb ticking, if you won’t take seriously your responsibility to the people of Pennsylvania, then find another job.”
Republican reaction was swift and harsh. Senate President Pro Tem Joe Scarnati, R-Jefferson, called the governor’s proposal “a massive tax-and-spend budget built on a pile of rubble.” Senate Majority Leader Jake Corman, R-Centre, called the governor’s address the “most absurd” of the 18 budget addresses he has heard, and its tone divisive.
“I don’t know how he thinks that gets him votes in either caucus. My guess today is that we are further away than we were in June of last year,” Mr. Corman said.
House Speaker Mike Turzai, R-Marshall, said that far from shirking its duties, the General Assembly during the protracted impasse sent three state budgets to Mr. Wolf’s desk. Mr. Wolf signed the last of those budgets in part in late December, using line-item vetoes to cut about six months of the main K-12 education line, among other reductions.
Education groups on Tuesday praised Mr. Wolf’s proposals for funding increases but said that state officials must settle the question of education spending for the current year.
Democrats rallied behind the governor. House Minority Leader Frank Dermody, D-Oakmont, said “it's about time we told Pennsylvanians the truth” about the state’s budget deficit.
The state’s Independent Fiscal Office has said Pennsylvania will face a $1.9 billion structural deficit in the next fiscal year, in large part due to mandated cost increases in areas such as pensions and human services, such as Medicaid.
The Wolf administration describes a choice between increasing the state’s annually recurring revenues and what his budget documents call a “grim” future of state budget deficits and cuts in funding for schools and human services.
By boosting the personal income tax rate and raising or enacting other taxes, Mr. Wolf would support a budget with a general fund of $32.7 billion plus a transfer of $560 million in payments for the pensions of school workers. In the current year, Mr. Wolf has urged legislators to enact a spending plan of about $30.8 billion.
The governor would apply the sales tax to basic cable television, movie theater tickets and digital downloads. He would impose a severance tax of 6.5 percent on the extraction of natural gas, a proposal criticized by industry groups. He would raise the tax per pack of cigarettes from $1.60 to $2.60 and tax the wholesale price of other tobacco products. In all, his revenue proposals would increase state revenue collections in the upcoming year by $2.7 billion, according to the budget office.
The governor has based his new budget proposal upon a major assumption: that an earlier tentative agreement for a current-year spending plan, which has been declared dead by Republican leaders, will be made into law. The Republican majorities in the House and Senate have resisted Mr. Wolf’s calls for higher taxes, and insisted that the state should remake its pension plans for state and public school workers and its system of alcohol sales. After months of negotiations, a framework agreement including a budget and pension and liquor bills progressed through the Senate but did not win final passage in the House. The Republican leaders of the House and Senate now say the framework is no more.
Mr. Wolf’s budget proposal assumes the state adds $377 million in the current year to the main funding line for K-12 education, an amount he says was included in the framework deal. His proposed budget then adds $200 million in the basic education subsidy in the fiscal year beginning July 1. It would also add $60 million next year for early childhood education and $50 million for special education, after seeking additional increases in both those categories this year.
In higher education, Mr. Wolf proposes 5 percent increases in the current year and next year for community colleges, the universities of the State System of Higher Education and the state-related universities, which include the University of Pittsburgh and Penn State University.
Beyond education, Mr. Wolf’s budget proposes to boost the state’s minimum wage from $7.25 an hour to $10.15. The budget estimates this increase would benefit more than 1.2 million Pennsylvanians, and would boost state revenues by $60 million. Mr. Wolf’s budget secretary, Randy Albright, said the revenue estimate was based on assumptions of increased personal income tax from wage earners, as well as additional income they would spend, leading to more sales tax revenue.
Legislators last voted to raise the state’s minimum wage in 2006; in 2009, the federal minimum wage increased from $6.55 an hour to $7.25, which also increased the wage in Pennsylvania.
In the Department of Human Services, Mr. Wolf proposes restoring county human services funds that were cut by 10 percent during the previous administration.
“Without that money in there for the counties, people go unserved. And when they go unserved, bad things happen,” said Ted Dallas, Mr. Wolf’s secretary of human services.
His budget would allocate an additional $12 million for 2,300 more children to receive subsidized child care. He also calls for $34 million to allow 11,250 more people to receive substance abuse treatment.
Mr. Wolf also proposes several initiatives aimed at cost savings, among them merging the Department of Corrections and Board of Probation and Parole for a savings of $10 million.
His budget proposal will now go before appropriations committees in the House and Senate. An on-time budget for the next fiscal year would be due June 30.
Karen Langley: firstname.lastname@example.org or 717-787-2141 or on Twitter @karen_langley. Kate Giammarise: email@example.com or 717-787-4254 or on Twitter @KateGiammarise.
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