Wolf's Budget Rhetoric a Relief, but Doesn't Match Reality

Charles Mitchell, president and CEO of the Commonwealth Foundation, issued the following statement in response to Gov. Wolf’s fifth budget address:

What a change four years and nine defeated tax hikes make! All Pennsylvanians should be relieved that in today’s budget address, Gov. Wolf continued to run away from the extreme rhetoric and actions of his early days in office, when he demanded huge tax increases and vetoed pension reform. They should also look out, because not all the rhetoric we heard today matches the reality.

It’s wonderful that the governor wants to reduce Pennsylvania’s extreme corporate tax rate—which is sending jobs to other states and other countries every day—and reform our criminal justice system in ways that will make us safer and improve lives. But when you dig into his actual proposals, his claims of not raising taxes, giving students better education opportunities, and embracing individual responsibility evaporate.

Separate from his budget address, Gov. Wolf has called for a tax increase on the 2.7 million families that use natural gas to heat their homes—and $8.1 billion in debt their children and grandchildren will have to pay off. His approach on education is more of the same, making no mention of raising the limits on tax credit scholarship programs—which are so popular they could double in size and still not meet demand—or establishing innovative education scholarship accounts.

And while he lauded “the power of our work ethic and the importance of individual responsibility,” he has twice vetoed measures that would require able-bodied, childless adults on welfare to seek work—the true solution to poverty.

Commonwealth Foundation looks forward to making the good ideas the governor proposed today a reality—especially tax reform and corrections reform—along with those he unfortunately left out.

5 State Budget Solutions

1. Make spending accountable with the Taxpayer Protection Act (TPA): The TPA limits General Fund spending increases to the rate of inflation plus population growth. This commonsense policy allows government to grow at a rate Pennsylvanians can afford. If the TPA was enacted in 2003, each Pennsylvania family of four would have kept more than $11,000 in taxes.

2. Enact state tax reform: States with lower tax burdens outperform states with higher tax burdens in both job and income growth. Unfortunately, Pennsylvania levies a high tax burden on its citizens and businesses. Lawmakers need to enact simple, fair, and reliable tax reforms to give Pennsylvanians relief and counter negative migration, population, and job growth trends. Gov. Wolf’s proposal to lower the corporate tax rate is great start, but the five-year implementation period should be accelerated.

3. Expand educational options by raising the limits on education tax credits: Pennsylvania’s education funding per student is $3,932 above the national average, or the 9th-highest funding level in the country. Our problem is not the amount of education funding, it is a lack of education options. We can both provide funding to public schools that need it through a fair funding formula, while offering parents a choice by raising tax credit scholarship limits.

4. Establish welfare work requirements: We must ensure that government resources are available for those that need it most by implementing fair and reasonable work requirements for healthy, childless adults. According to DHS, about 495,000 healthy adult Medicaid recipients who do not have young children report no wages. Meanwhile, the Foundation for Government Accountability estimates 202,800 healthy adults on food stamps are not working. This is incredibly disheartening because we know the greatest anti-poverty measure is a job.

5. Pass the Justice Reinvestment Initiative II: The 2012 Justice Reinvestment Initiative (JRI) reforms led to historic declines in the prison population and declining crime rates. Yet, Pennsylvania still has the highest incarceration rate in the Northeast thanks to our inefficient and ineffectual sentencing system. JRI II, which passed the Senate last year, continues to address high recidivism rates with effective sentencing guidelines, better probation practices, and customized parole supervision.

Commonwealth Foundation experts are available for comment. Please contact Michael Torres at 850-619-2737 or [email protected] to schedule an interview.

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