Pennsylvania State Budget




Audio: A Look at Gov. Wolf's "Concessions"

AUGUST 26, 2015

As state budget negotiations drag on, Gov. Wolf is pointing the finger at Republicans, claiming they have refused to move after he made “concessions on everything." So what compromises are included in these so-called concessions?

To name a few, Wolf’s original spending plan; Wolf’s original plan to increase the income tax; Wolf’s original plan to increase the sales tax; and Wolf’s original plan to borrow $3 billion in pension obligation bonds.

CF’s Matt Brouillette spoke with Gary Sutton on WSBA yesterday to discuss Gov. Wolf’s alleged budget compromises.

Matt explained how Gov. Wolf’s pension plan only includes reforms for 5 percent of current employees. It would do little to upend the destructive status quo, ensuring the pension system's problems are passed onto future generations.

Legislative leaders wisely rejected this “compromise” while responding with their own offer–one they hope will lead Gov. Wolf to abandon his unpopular budget proposal.

Click here or listen below to hear more.

The Gary Sutton Show airs daily on WSBA 910AM in the York area.

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posted by JONATHAN REGINELLA | 11:34 AM | Comments

Will Wolf Take 'Yes' for an Answer?

AUGUST 25, 2015

On June 30, state lawmakers passed a budget that offers $10.4 billion in state support for public schools. This represents an all-time high—indeed, an increase from last year’s all-time high—and represents a $1 billion increase since 2010-11.

Recently, legislative leaders offered Gov. Wolf a deal that would increase education spending by another $300 million. At the time of this writing, Gov. Wolf is “still considering” this offer. The governor is struggling to take "yes" for an answer.

The chart below compares the budget passed by the General Assembly, the compromise offered by Republican leaders, and Governor Wolf's proposal (which comes with $8 billion annually in new taxes on working families).

Support of Public Education Veto

posted by NATHAN BENEFIELD | 04:25 PM | Comments

Audio: Gov. Wolf's Gambling Problem

AUGUST 21, 2015

There are numerous ways Gov. Wolf can balance the budget without raising taxes: reforming the pension system, cutting corporate welfare and selling the liquor business.

Instead, he plans on adding to state debt with pension obligation bonds–essentially borrowing money to gamble in the stock market while hoping for a good return.

CF’s Nate Benefield talks with WAEB's Bobby Gunther about Gov. Wolf’s misguided borrowing plans.

Nate explains how pension obligation bonds have a terrible trackrecord. Even Pittsburgh’s Democratic Mayor Bill Peduto has publicly criticized Gov. Wolf’s plan to use pension obligation bonds, saying his city should be the litmus test that proves pension bonds are not a solution.

Gov. Wolf should listen to his constituents who want long-term solutions, not historic tax increases.

Click here or listen below to hear more.

Bobby Gunther is on WAEB News Radio weekdays from 5 a.m. to 10 a.m.

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posted by JONATHAN REGINELLA | 03:30 PM | Comments

Audio: The Real Danger of a Severance Tax

AUGUST 19, 2015

The Pennsylvania state budget remains long overdue, mostly due to Gov. Wolf’s misconstrued idea of compromise. He continues to insist on a severance tax to increase education spending, but a breakdown of his proposal shows most of the money for education comes from other tax increases.

CF’s Matt Brouillette joined Paul Guggenheimer on WESA’s Essential Pittsburgh radio show to discuss Gov. Wolf’s proposed severance tax.

Matt reminds listeners that Pennsylvania already has a severance tax–called an Impact Fee. “While we don’t call it a severance tax, we have an effective severance tax that the Independent Fiscal Office has said it is about 4.7%”.

A severance tax, as Matt points out, would bring economic harm not just to the natural gas industry, but to all Pennsylvanians. This includes $180 million more in higher utility taxes for poor and middle class families and 4,138 fewer private sector jobs in 2017.

Click here or listen below to hear more.

The Essential Pittsburgh radio show airs weekdays from noon to 1 p.m.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

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posted by JONATHAN REGINELLA | 11:49 AM | Comments

Gov. Wolf's So-Called Compromise

AUGUST 17, 2015

Gov. Wolf proposed a new "compromise" on pensions and the budget last week, according to news reports.

Here is what that compromise includes:

You can tell your lawmakers what you think of this compromise plan here.

posted by NATHAN BENEFIELD | 10:26 AM | Comments

Audio: Gov. Wolf's Budget Blindspot

AUGUST 12, 2015

CF’s Nate Benefield joins Dom Giordano on Talk Radio 1210 WPHT to discuss the budget impasse and Gov. Wolf’s misleading claims.

During their conversation, Nate shed light on Gov. Wolf’s disconnect with voters.

“Voters, they did elect Wolf but they also elected large Republican majorities in the House and Senate. It’s not just those Republicans that are against some of Tom Wolf’s proposals. When they actually held a vote on his $4.6 Billion tax increase, it got zero votes.”

Nate also clarifies that no money will be going out to groups and organizations that Pennsylvanians depend on–including non-profits and schools.

He points out that residents “are still going to have to pay their taxes [but] agencies are not going to paid, non-profits are not going to get their money, and schools eventually are going to be missing their payments from the state”.

Click here or listen below to hear more.

The Dom Giordano Show airs daily on WPHT in Philadelphia

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posted by JONATHAN REGINELLA | 01:42 PM | Comments

Listen: Telephone Townhall on PA Budget and More

AUGUST 10, 2015

Matt Brouillette and Rich Zeoli of Talk Radio 1210 WPHT answer questions about the Pennsylvania budget during a telephone town hall.

Matt explains how Gov. Wolf's tax plan that would smack Pennsylvanians with a tax increase "larger than the other 49 states' combined." Such a high burden for taxpayers is one of the many reasons Gov. Wolf's tax proposal received zero votes in the House. 

Other issues brought up by distressed callers include the harms of a natural gas severance tax and the myth of an underfunded education system

Click here or listen below to hear more of Matt and Rich's answers.

posted by JONATHAN REGINELLA | 00:42 PM | Comments

Silly Talk with Gov. Wolf

AUGUST 6, 2015

Gov. Tom Wolf appeared on Radio Smart Talk yesterday morning. He mostly danced around host Scott LaMar's questions—claiming "You don't know what I’ve been supporting" on pension reform, and comparing legislation to allow private retailers to sell wine to robbing someone’s home.

But his answers about the size and impact of his tax proposals were particularly dishonest.

Asked if his tax increase was the highest in the nation, and higher than every other state combined, Wolf responded, “That’s not true.”

In fact, Wolf’s $4.6 billion increase next year is $4 billion more than any other state.

Wolf went on to imply that his plan calls for a dollar for dollar shift to reduce property taxes.

“I’m talking about a $3.8 billion tax decrease for property taxes…

I’m calling for—yes that’s right—a $3.8 billion increase in state taxes….

Those net out.”

I’m not sure Wolf has read his own budget!

In fact, he has proposed $4.6 billion in tax increases next year, and $8 billion the following year. His property tax reductions and renter relief—beginning in 2016—are only $3.6 billion.[1]

That’s more than $12 billion in tax increases for only $3.6 billion in property tax reductions. Only 30 cents of every dollar in new taxes goes towards tax relief. Even looking just at the full year, 2016-17, less than half of Wolf’s taxes goes towards tax relief.

A moment later, Wolf does acknowledge there’s more to his tax plan than a dollar for dollar property tax shift, but dismisses that as minimal.

“What I’m proposing to actually close the gap is not that big.”

Wrong! The net increase is larger than the proposed property tax relief. We’ve pegged it as a net increase of almost $1,400 per family of four, using Wolf’s own estimates.

The Independent Fiscal Office estimates are slightly different, but show the same trend—tax increases will be double property tax relief.

It's no wonder Wolf tried to dodge the question. His tax increase, especially his sales and income tax increases, would hit working families hard.

In fact, the the IFO projects that every income group would pay more in taxes, even after the property tax relief.

Estimated Revenue Change, Wolf's Budget Proposal in millions
  2015-16 2016-17 2017-18 2018-19 2019-20
Income Tax Increase $2,243 $2,396 $2,509 $2,631 $2,759
Sales Tax Increase $399 $991 $1,024 $1,058 $1,093
Sales Tax Expansion $1,172 $2,979 $3,207 $3,423 $3,599
Total Sales $1,571 $3,970 $4,231 $4,481 $4,692
Total Sales + Income $3,814 $6,366 $6,740 $7,112 $7,451
Other Tax Increases $816 $1,009 $867 $1,067 $1,281
Total Tax Increase $4,628 $7,375 $7,607 $8,179 $8,732
 
Property Tax Reductions $0 $2,732 $2,732 $2,732 $2,732
Rent Rebates $0 $369 $383 $396 $388
Philadelphia Reductions $0 $452 $452 $452 $452
Total Reductions $0 $3,553 $3,567 $3,580 $3,572
 
Net Tax Increases $4,628 $3,822 $4,041 $4,599 $5,159
Source Independent Fiscal Office

 


[1] Wolf’s “$3.8 billion in property tax relief” includes $600 million from current gaming money that goes towards reducing property taxes, but excludes $400 million from new taxes for renter relief.

posted by NATHAN BENEFIELD | 09:44 AM | Comments

Pittsburgh Mayor Peduto Warns Wolf on Pension Bonds

JULY 30, 2015

Public Pension Reform

This week, Pittsburgh Mayor Bill Peduto criticized Gov. Wolf’s plan to sell $3 billion in pension obligation bonds. In a meeting with editors and reporters from the Pittsburgh Tribune-Review, the city’s Democratic mayor explained that this same plan nearly led Pittsburgh into bankruptcy and that:

“One out of every $5 we spend every year just goes back to paying those old bonds. Not only that, but our debt ratio is higher than New York City's when they went bankrupt.”

With Pittsburgh facing a $1.2 billion pension obligation, Peduto said “[t]here has to be a new mechanism from the state in how pensions are paid.”

Luckily, there is.

Peduto, along with a number of mayors and local government officials, supports state legislation that would reform the municipal pension plans. Specifically, these bills would put new employees into a 401k-style plan, and move pensions out of the collective bargaining process. There is a growing bipartisan support for municipal pension reform across the commonwealth. 

And Peduto is far from alone in criticizing Gov. Wolf's ill-conceived pension obligation bond plan. Financial experts and rating agencies across the country have warned against using pension bonds to try to repay debt with more debt. Many cities, like Pittsburgh, and several states have tried to use pension bonds to get out of a bad financial situation—it hasn't worked yet.

posted by JONATHAN REGINELLA | 04:23 PM | Comments

Which States Have the Biggest Tax Increases?

JULY 30, 2015

Previously, we blogged on how Gov. Wolf’s tax proposal raises more revenue than the tax proposals in the 49 other states combined.

To put this another way, Wolf’s $4.6 billion tax increase is nearly $4 billion more than any other state. Only two other states—Connecticut and Alabama—had tax proposals even one-tenth as large as Tom Wolf’s proposal.

It is no wonder the House overwhelmingly rejected the governor’s proposal, which failed to garner a single vote as it was defeated 0-193. 

posted by NATHAN BENEFIELD | 03:18 PM | Comments

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