In April, Gov. Wolf crisscrossed the state on a “Jobs that Pay” tour saying his record-setting tax-and-spend budget proposal will boost economic growth. Today, a new, nonpartisan study says even more harm could be done to middle class families: 30,000 jobs will not be created next year if Wolf’s plan is passed.
The Commonwealth Foundation worked with the Beacon Hill Institute at Suffolk University to apply an economic modeling program to analyze the overall impact of Gov. Wolf’s proposals. Economists at Beacon Hill developed the Pennsylvania State Tax Analysis Modeling Program (PA STAMP) to calculate the impact of Gov. Wolf’s tax proposals on job creation. As a result of Wolf’s tax increases, 29,408 jobs will not be created in 2015-16.
A new report on economic freedom released this week by the Fraser Institute ranks Pennsylvania 27th among the 50 states. The report notes that states with the most economic freedom enjoyed a $55,000 average GDP per capita while the least-free states averaged just $48,000—a $7,000 difference per person.
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Governor Wolf marked his 100th day in office by providing a list of accomplishments. In reality, the memo is more of a status update since many of his initiatives, including the natural gas tax and his budget proposal, are a long way from passage.
But the real question is not what the governor accomplished in an arbitrary 100 days, but what he can do over the next 1,360 days to improve the lives of Pennsylvanians. Here’s a few suggestions based on the governor’s goals for Pennsylvania:
Protect taxpayers to foster "jobs that pay."
Elected officials should pass the Taxpayer Protection Act (TPA) to protect the middle-class from reckless spending and tax increases. The TPA limits future government spending to inflation plus population growth. Reining in government spending is critical to creating an economic climate that attracts jobs—and working Pennsylvanians deserve a government that lives within its means.
Put students first to build "schools that teach."
Our education system is broken. From the commonwealth’s senseless funding formula, to wasteful mandates like prevailing wage, to the need for more school choice, there are many ways for the governor to create an education system that truly serves students. Gov. Wolf should work with the legislature to create a funding formula where dollars follow the students, repeal prevailing wage and remove obstacles to greater school choice, such as creating alternative authorizers for charter schools.
Enhance transparency and accountability to create a "government that works."
The lack of transparency in Harrisburg and special privileges enjoyed by select groups have created a system ripe for corruption and abuse. In his next 1,360 days, Governor Wolf has an opportunity to continue promoting transparency by opening the closed-door union contract negotiation process and ending the government unions’ unique privilege of using taxpayer resources for partisan politics.
These reforms are by no means exhaustive, but they would move our state in a pro-growth direction after years of profligate spending, which have failed to revive our historically weak economy. After decades of focusing on finding more revenue for state coffers, it’s time to restrain excessive government and transform Pennsylvania into a state of opportunity again
Is placing 39 out of 50 in any competition acceptable? Most people would say no, which is why a new index published by the American Legislative Exchange Council (ALEC) is so unsettling.
Released on an annual basis, the Rich States, Poor States index ranks states based on their economic performance and economic outlook. In the first category, Pennsylvania performed poorly, ranking 39th. Future economic performance doesn’t look promising either. The authors of the index place Pennsylvania in the bottom ten at 41.
The rankings are based on fifteen different variables that include tax rates, debt service as a share of tax revenue, labor regulations, and tax or expenditure limits. Pennsylvania ranks poorly in nearly all of these areas year after year. As Jana Benscoter of Watchdog points out, Pennsylvania’s economic outlook ranking has never been higher than 33rd.
This isn’t surprising given the dramatic growth of government spending and taxation since 1970 and Pennsylvania’s inhospitable regulatory environment, both of which are roadblocks to job creation and prosperity.
But Pennsylvania doesn't have to continue down this path. If the commonwealth lowers the tax burden on businesses and families, restrains spending growth, and fixes its regulatory climate, we can shed these low rankings and grow an economy that works for everyone.
We're at a watershed moment, with a choice between the largest tax hike in Pennsylvania's history or reducing government spending to leave more in the pockets of Pennsylvanians. It's a choice between prosperity or economic stagnation.
Last week, CF President & CEO Matthew Brouillette appeared on PCN’s Call-In Program with Steve Herzenberg, the Executive Director of the Keystone Research Center, to discuss Gov. Wolf’s costly budget proposal. While Herzenberg defends Wolf’s budget proposal, Matt points to some of the hard realities it will bring to every family in Pennsylvania.
Even though Gov. Wolf campaigned on a promise to not raise taxes on middle class families, his budget proposal would hit them with the largest tax increase in the state’s history.
In attempt to soften the blow of this broken promise, Gov. Wolf wants to implement property tax rebates. Matt explains that even this will fail to help Pennsylvanians since, over the next two years, less than $0.30 of every dollar in new state taxes will be used for property tax rebates.
Rather than put a heavier burden on Pennsylvania’s taxpayers, Matt explains that the government’s focus should be on “creating opportunities for everyone and reduc[ing] the burden of entry into the workplace and the middle class that are trying to grow businesses.”
Watch the full discussion on PCN’s Call-In Program.
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The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.