A Budget of Contradictions

On Tuesday, Gov. Wolf did not deliver the budget address Pennsylvanians needed to hear. Instead, he offered more of the same: a dramatic increase in the size and scope of government.

A review of both his rhetoric and policy proposals reveal glaring contradictions that call into question his vision for Pennsylvania. On the one hand, the governor touts spending restraint and proposes lower taxes to make the commonwealth more competitive. On the other, a multi-million-dollar tax and a dramatic spending increase. Let’s look at spending first.

In their budget summary, the administration claims Gov. Wolf has “fundamentally changed” the approach to budgeting. As an example, they point to holding spending below $2.85 billion over the prior three years. As Nate has pointed out, this increase is better characterized as a spending surge, not restraint. Spending over the last three years has exceeded all combined increases over the prior 8 years.

The claim is even more unbelievable when the governor’s prior and current budget proposals are considered. His first budget alone would have increased General Fund spending by $2.5 billion. As for his most recent proposal, General Fund spending would rise by approximately $1 billion. This figure is likely understated, as his plan would shift General Fund spending to the shadow budget.

On the tax front, the governor’s budget would impose a levy on the natural gas industry in addition to all the other taxes they pay, which includes a unique “impact fee” that has raised $1.22 billion in revenue since 2012. This additional burden apparently won’t harm the industry’s competitiveness. Yet, in the same proposal, Gov. Wolf wants to lower the corporate net income tax to “create a more competitive business climate.”

If reducing the tax burden on companies will foster a more competitive environment and maximize new business investment, why would Gov. Wolf want to impose yet another tax on the natural gas industry? This inconsistency would harm thousands of Pennsylvanians who depend on the industry for their livelihoods.

If the governor believes in spending restraint and lower taxes, then his budget should have reflected this vision. But to use the rhetoric of fiscal responsibility and free markets while advocating for just the opposite is misleading and counterproductive.