Breaking Promises to Fund Broken Programs

During his gubernatorial campaign, Tom Wolf promised to reduce taxes on working people. As a matter of fact, his campaign attacked Gov. Corbett for raising taxes. An October 2014 campaign blog post claimed, “Unlike Governor Corbett, Tom Wolf will fight to reduce taxes on working, middle-class families.”

Now, Gov. Wolf is pursuing the same policies his campaign denounced fewer than two years ago. Since taking office, the governor has proposed raising taxes on low- and middle-income people six times. His latest proposal includes a tax hike of about $850 per family of four.

Gov. Wolf claims tax increases are necessary to fix Pennsylvania’s $2 billion budget deficit. This is false for two reasons. First, Secretary of Revenue Randy Albright admitted the tax hikes will not erase the deficit. Second, reasonable alternatives exist to fix the fiscal follies of the past few decades. We don’t need to balance the state’s budget on the backs of taxpayers.

Beyond higher taxes, the governor wants to increase spending by 10 percent—the largest one-year growth in 25 years. This includes more than $742 million in corporate welfare—a $58 million increase above current spending levels.

Table 1. Corporate Welfare Programs in Operating Budget (in thousands)	2015-16 Budget (projected)	2016-17 Budget (projected)
Spending Programs
Agricultural Excellence	$1,100	$0
Agricultural Research	$1,587	$0
Agricultural Promotion, Education and Exports	$250	$0
Ben Franklin Tech Development Authority Transfer	$14,500	$14,500
Commonwealth Financing Authority Transfer	$88,812	$95,614
Council on the Arts	$892	$903
Food Marketing Research	$494	$494
Grants to the Arts	$9,590	$10,590
Hardwoods Research and Promotion	$350	$0
Industry Partnerships	$1,813	$11,613
Infrastructure and Facilities Improvement Grants	$19,000	$30,000
Keystone Communities	$6,350	$15,000
Livestock Show	$177	$0
Marketing to Attract Business	$2,005	$3,014
Marketing to Attract Tourists	$7,014	$4,291
Municipalities Financial Recovery Revolving Fund Transfer	$3,000	$4,000
New Choices/New Options	$500	$0
Open Dairy Show	$177	$0
Partnerships for Regional Economic Performance	$11,880	$9,880
Pennsylvania First	$20,000	$45,000
Pennsylvania Race Horse Development Fund	$253,471	$250,073
Tourism-Accredited Zoos	$550	$0
Transfer to the Nutrient Management Fund	$2,714	$2,714
Office of International Business Development (World Trade PA)	$5,829	$6,942
Youth Shows	$140	$140
Total	$452,195	$504,768
Tax Credits
Film Tax Credit	$60,000	$60,000
Job Creation Tax Credit	$10,100	$10,100
Research and Development Tax Credit	$55,000	$55,000
Keystone Opportunity Zone	$70,300	$78,000
Keystone Innovation Zone	$25,000	$25,000
Resource Enhancement and Protection Tax Credit	$10,000	$10,000
Alternative Energy Production Tax Credit	$2,000	$0
Total	$232,400	$238,100
Total	$684,595	$742,868

Campaign promises aside, apparently Gov. Wolf believes taxing low- and middle-income earners to fund corporate welfare will improve the state's economy. Yet, concentrating more economic power in the hands of Harrisburg has produced disappointing results.

The alternative—removing government barriers to growth—has a record of creating and sustaining economies that produce better job growth and higher wages for working people.

Ultimately, we will solve our economic challenges not by giving more power to Harrisburg politicians but by freeing entrepreneurs to serve the needs of Pennsylvania's communities.