Historic Spending and Tax Hikes Will Hurt Pennsylvanians
Gov. Wolf’s budget proposal expands the size of government and shrinks the size of your wallet.
His 2015-2016 budget calls for a net $4.5 billion tax increase, which amounts to $1,425 per family of four. His proposal comes at a time when Pennsylvanians already shoulder one of the highest tax burdens in the country.
The governor argues that his property tax relief plan would offset the brunt of these tax hikes, but this relief is delayed until 2016-17. In the meantime, the state will collect higher taxes and retain those funds.
Should Gov. Wolf’s property tax plan pass the General Assembly, there’s no guarantee school districts will stop raising property taxes. Even if local governments did manage to hold the line on property taxes, Pennsylvanians would suffer a net tax increase of $4.3 billion in the 2016-2017 budget.
These tax hikes will grease the wheels for record levels of spending. Under Gov. Wolf’s plan, true General Fund spending in 2015-16 would reach $31.6 billion (Governor Wolf moves $1.75 billion in school pension payments to a new fund, which makes the General Fund increase appear smaller). This amounts to the largest spending increase in 25 years.
Of course, the General Fund is only a portion of Pennsylvania’s total operating budget. If each of Gov. Wolf’s proposals were enacted, Pennsylvania’s total operating budget would surpass $78.6 billion—the highest spending level in the commonwealth’s history.
Unsustainable spending growth and tax increases have been the pevailing trend in Pennsylvania since the 1970s. As a result, Pennsylvania ranks near the bottom in job, income and population growth. Governor Wolf’s proposals would accelerate this trend despite evidence of its harmful consequences.
There is a better alternative.
We need to grow the economy by limiting government. This means unleashing innovators and protecting working families—not weighing them down with higher taxes.
For a more detailed look at Governor Wolf’s budget proposal, read our latest policy memo.