Pennsylvania State Budget

Recent Issues

Is Pa. Budget Groundhog Day Ahead?


Instead of changing course entering the new budget season, Wolf appears poised to continue governing by attack ad. No wonder the latest polling shows Wolf’s approval is lower now than at the same point in Corbett’s administration.

Myth vs. Fact as Wolf Announces Education Plans

FEBRUARY 2, 2016 | News Availability

The reality is, state taxpayers are already paying enough for public education. The governor and lawmakers must find smarter ways to spend this money, not keep asking for more.

Shhh... State's Fiscal Code Hides Earmark Secrets


On Tuesday, the Pa. House passed a “fiscal code” which implements parts of the new state budget. While the fiscal code includes many important reforms that benefit taxpayers, it has also become a political vehicle to satisfy lobbyists’ appetites for earmarks.

Recent Blog Posts

Audio: PA Budget Groundhog Day

FEBRUARY 3, 2016

Groundhog Day has come and gone, but Gov. Wolf hasn’t stopped celebrating Punxsutawney Phil’s big day. Paying homage to the theme of the Groundhog Day movie, Wolf has trapped Pennsylvanians in a time loop similar to the one that imprisoned Bill Murray's weatherman character–only this time loop is budget-related.

CF’s Matt Brouillette was on the Gary Sutton Show discussing his recent op-ed on PennLive, which asks if Gov. Wolf's second budget address will give taxpayers déjà vu all over again. 

Matt notes that despite his pledge to be a “different kind of governor”, Wolf is “doubling down on the same rhetoric, the same approach that, frankly, failed in 2015”. He plans to propose the same historic, broad-based tax hikes on Pennsylvania families–proposals that have failed a total of five times.

What's more, in true Groundhog Day fashion, Wolf is repeating the myths that Pennsylvania’s education funding has been cut and the system is underfunded. Matt dispels this myth, noting Gov. Wolf is the one who “vetoed over $3 billion going to education” which would have “increased [education] spending by over $400 million."

Gov. Wolf also plans to re-propose hitting the flailing drilling industry with a severance tax to “fund education."­ Not only would this drive out more businesses from Pennsylvania but it would also add $180 million to taxpayers' utility bills. 

Instead of repeating past mistakes, Gov. Wolf should break the budget time loop by focusing on resolutions that benefit all Pennsylvanians–such as limiting the unconstrained growth of government spending and cutting corporate welfare subsidies­.   

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 | 05:08 PM | Comments

Demographics Destined to Hold Pennsylvania Back?

JANUARY 25, 2016

Last year, Pennsylvania lost one person to another state every 12.5 minutes. In total, the state’s net domestic migration rate was negative: 41,607 more people moved out of Pennsylvania than moved into the commonwealth.

This exodus is nothing new. The state’s net migration rate has been negative since at least 2011.

While Pennsylvania's total population rose last year, growth has been historically slow. The tepid growth is driven by a “natural increase” (more births than deaths) and international migration.

The chart below illustrates this dynamic.

As we've pointed out in the past, Pennsylvania’s projected demographic trends could exacerbate the state’s fiscal problems. Over the next decade, the population will grow older, which could lead to a demand for more government services, with fewer taxpayers to support such demands.

To avoid this fiscal calamity, the state needs to create an environment conducive for strong economic growth. Economic growth fosters self-sufficiency, thereby reducing the need for government assistance (while higher incomes mean greater tax collections too). 

This raises an important question: How do policymakers create economic growth and attract more people to Pennsylvania?

It starts with reducing the tax burden on working people. Over the last five years, the states with the largest migration losses had a higher average tax burden (10.93 percent) than the states with the biggest migration gains (8.84 percent).

State Domestic Migration
Ten States with the Lowest Rate of Domestic Migration
States Domestic Migration (2010-2015) State-Local Tax Burden as a Share of State Income
New York -653,071 12.70%
Illinois  -425,954 11.00%
New Jersey -269,194 12.20%
California -266,115 11.00%
Michigan -191,130 9.40%
Ohio -153,296 9.80%
Pennsylvania  -132,073 10.20%
Connecticut -104,537 12.60%
Maryland -56,054 10.90%
Kansas -52,597 9.50%
Total pop./Avg. tax burden -2,304,021 10.93%
Ten States with the Highest Rate of Domestic Migration
States Domestic Migration (2010-2015)  State-Local Tax Burden as a Share of State Income
Georgia 82,493 9.10%
Oregon 93,408 10.30%
Tennessee 104,944 7.30%
Washington 124,326 9.30%
South Carolina 159,023 8.40%
Arizona 160,346 8.80%
North Carolina 180,189 9.80%
Colorado 192,337 8.90%
Florida 650,660 8.90%
Texas 736,492 7.60%
Total pop./Avg. tax burden 2,484,218 8.84%
Sources: Tax Foundation, U.S. Census Bureau 

Skeptics who dismiss low taxes as a driver of population migration point to another magnet: weather. More people are certainly moving from the Northeast to warmer climates in the South. But this doesn't hold true everywhere. From 2010-2015, Hawaii (14th highest tax burden) and California (6th highest tax burden) collectively lost more than 284,000 people. Meanwhile, North Dakota (33rd highest tax burden), which isn't exactly known for its hospitable climate, gained 53,048 people over the same time frame. 

I'd wager most people would prioritize a decent living for their families over the climate in any given state. If they make the former a higher priority, low tax states will, more often than not, be their destination.

posted by BOB DICK | 05:24 PM | Comments

Despite Name-Calling, Wolf's Tax Hike is the Largest

JANUARY 22, 2016

The Wolf administration continues to deny basic facts about their original proposed tax hike. Instead of responding with facts, the governor's staff relies on name-calling and personal attacks. The Altoona Mirror published my response (paywall) to the administration's latest attack on CF.

In a recent story about the state budget, Jeff Sheridan, a spokesman for Gov. Tom Wolf, launched personal attacks against the Commonwealth Foundation, while calling factual information we produced “completely false.”

What is Mr. Sheridan disputing? According to the nonpartisan National Association of State Budget Officers (see Table 21 of their Spring 2015 survey of the states), Gov. Wolf’s original proposal for a $4.6 billion tax increase is the largest proposed tax increase in the country—eight times larger than the next-highest increase in Connecticut.

In fact, Wolf’s plan represented a larger tax hike than every other state’s tax increase combined.

Unfortunately for Pennsylvania, Wolf’s press office has a long history of attacking their critics, but a poor record of providing honest information about their harmful tax proposals.

After all, the $4.6 billion tax hike—which would have come to $1,400 per family of four—came straight from the governor’s original budget. All Pennsylvanians benefited when the General Assembly stood firmly against this record-breaking tax increase, which helped earn Wolf the title of most liberal governor in America.

For the governor’s spokesman to deny easily verifiable information and attack the messenger smacks of desperation. What Pennsylvania needs amidst this seven-month budget impasse is honest leadership, not partisanship and petty name-calling.

posted by NATHAN BENEFIELD | 11:39 AM | Comments