Pennsylvania State Budget
Pension costs are ballooning so quickly, they threaten to consume funds for education, public safety and welfare. Without reform, Pennsylvanians face cuts to services, teacher layoffs, higher property taxes, and even seeing cities go bankrupt. These dire threats make pension reform urgent.
If the proposed sales tax expansion contained in Gov. Tom Wolf’s budget proposal becomes law, Louise Bell's nursing home costs will jump by $3,000—essentially adding a 13th month to her annual bill. That’s just one of the many unintended consequences of Wolf’s budget plan which—despite being sold as tax cut for middle-class families—would create few winners and many losers across every income level.
As part of his 2015-16 budget proposal, Gov. Tom Wolf has proposed using some revenue from increased state taxes for school property tax relief beginning in 2016-17. This policy brief examines more closely the proposed tax shift.
Recent Blog Posts
Public sector union contracts are a huge cost for the state government, and they have also become a conflict of interest for Gov. Wolf. He will be negotiating contract deals with 16 unions–which contributed millions of dollars to his gubernatorial campaign–behind closed doors, but some legislators want to open these doors to the public.
CF’s president & CEO Matt Brouillette recently spoke with Dom Giordano on Talk Radio 1210 WPHT in Philadelphia about several transparency bills that passed in the state Senate.
As Matt points out, SB 644, would put "a price tag on what the governor and the unions have negotiated” by empowering the Independent Fiscal Office to estimate the costs of public sector union contracts prior to ratification.
The second bill, SB 645, requires public sector collective bargaining agreements to be posted on state, school district, or local government websites two weeks prior to signing–giving the taxpayers a chance to see government union contracts before they have to pay the bill.
Listen below or click here for the interview.
The Dom Giordano Show airs every weekday from 9 am – 12 pm.
Read Matt's op-ed Wolf Negotiates Billions with Unions Who Gave Him Millions for more.
"It's not good enough to just say no and continue with the same old same old." So said Gov. Tom Wolf during his budget address, making clear his administration is committed to finding solutions, compromising, and working with both Republicans and Democrats to improve Pennsylvania.
Unfortunately, the governor isn't practicing what he's preaching.
Angela Coloumbis of the Inquirer reports that Wolf's spokesman Jeff Sheridan has emphatically repeated Wolf's opposition to Senate pension reform legislation and other Republican ideas to end business as usual in Harrisburg.
As I point out in a recent letter to the editor, Gov. Wolf needs to stop blocking transformative reforms—like liquor store privatization, pension reform, and the Taxpayer Protection Act—critical to achieving prosperity for all Pennsylvanians.
I’m disappointed to see Gov. Wolf’s spokesman Jeff Sheridan accuse Sen. Bartolotta (Governor wants to reinvest in higher education, April 29) of having a “profound misunderstanding” of middle class families, while at the same time misleading readers about how Gov. Wolf’s proposal harms those same middle class families.
Sheridan conveniently fails to mention that Wolf proposed taxing university fees, textbooks, and meal plans—to the tune of $150 million per year.
Middle class students will pay the brunt of that burden—as will middle class families paying more for nursing home care, day care, diapers or utility bills. A recent study by the Independent Fiscal Office notes that every income group will pay more under Wolf’s tax increases.
While Sheridan repeats campaign slogans about changing the status quo and blames the previous administration, Wolf’s budget calls for more of the same. Following decades of spending increases and tax hikes, Pennsylvania’s tax burden rose to the 10th highest in the nation. As a result, Pennsylvania has ranked among the worst states in job, income and population growth for 40 years.
Ironically, it is Gov. Wolf who is saying “no” to needed reforms to get our state on the right track. He has already threatened to veto liquor store privatization and has indicated opposition to pension reform. Wolf has also been silent on Sen. Bartolotta’s own Taxpayer Protection Act—which would limit the growth of state spending and unleash the private sector.
Higher taxes and spending won’t fix Pennsylvania’s economy, and it’s time for Gov. Wolf to stop blocking reforms that will offer prosperity for all Pennsylvanians.
From labor unions to local chambers of commerce, community leaders are expressing a lot of anxiety over Governor Wolf's natural gas severance tax proposal.
The proposed tax “is a Wyoming County economy killer,” says Gina Severcool Suydam, executive director of the county’s chamber of commerce, in a letter to the Scranton Times Tribune.
Ms. Suydam attributes to the gas industry impressive economic gains in the county between 2007-2012:
- 29 percent in average weekly wages — from $700 to $904.
- 148 percent in average weekly wages in the natural resources and mining industry — from $642 to $1,594.
- 134 percent in annual payroll — from $273 million to $639 million.
The biggest threat to the industry now is the proposed severance tax, says Ms. Suydam. It would be a serious additional cost burden in maintaining the competitiveness of Pennsylvania gas, consuming any advantage our producers currently have over gas from other areas.
Then there is Dennis Martire, vice president and Mid-Atlantic regional manager of the 40,000-member Laborers’ International Union of North America, who is quoted in a recent news release:
We already have seen a reduction in pipeline man-hours over the past two years related to falling gas prices,” reports Mr. Martire. If you excessively tax the shale industry, you risk hurting employers, workers and communities across the state.
Adding a tax to the current economic struggles of a promising industry would be ill advised. Or as Speaker of the House Mike Turzai (R-Allegheny) says:
The governor’s approach on a severance tax is punitive in nature and threatens to severely hurt hard-working Pennsylvania laborers, negatively impact family-sustaining jobs and shut down production and downstream benefits for all Pennsylvanians.
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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.