The Senate just passed and the House will soon vote on another no-tax-hike, balanced budget for fiscal year 2015-16. Gov. Wolf has already promised to veto it.
Remarkably, the governor continues to insist lawmakers need to raise state taxes to avoid a local tax hike:
Either way you get a tax increase, their [the legislature's] plan does have a tax increase. We cannot afford another property tax hike at the local level and the only way you can keep from doing that is a modest increase in taxes at the state level.
Of course, Wolf’s “modest” increase for the upcoming fiscal year is an astounding $2.7 billion tax hike. In nominal dollars, this would be the biggest in state history, and it includes an 11 percent retroactive personal income tax increase on working families and small businesses.
Beyond this, Wolf’s claim is false for several reasons:
First, two ways exist to close a budget deficit: increase revenue or reduce spending. The governor refuses to accept the latter, even as we've identified a long list of recommended savings.
Second, Wolf’s insistence that local property taxes will rise without state tax hikes is misleading at best. If he is truly concerned with property taxes, he should act to reduce exemptions for school property tax referendums.
Furthermore, the Wolf administration acknowledges tax hikes alone will not fix the structural deficit. During budget hearings, Budget Secretary Randy Albright admitted that if all Wolf’s proposals were adopted, the projected structural deficit would return in 2017-18.
This didn’t stop the governor from claiming yesterday:
We are looking at a train wreck in 2016-17, a huge deficit, if we don't do something about this.
Note to Governor Wolf: You can't close a structural deficit by spending even more. Wolf wants at least $500 million more in spending this year (even though it is already two-thirds complete). This is a sure way to widen, not close, any deficit.
The governor’s lip service to compromise notwithstanding, his partisan rhetoric and nine vetoes have blocked a final budget for months. Even more telling, he hasn't even convened a budget negotiation meeting since December.
Despite desperate warnings about bond downgrades, rising property taxes, and counties left to fund human services, this administration has failed to take action toward a final budget deal.