Note: This commentary was first published in the Allentown Morning Call.
For the past month, Gov. Tom Wolf has been holding press conferences at empty school buildings across the state. At each stop, Wolf defends his veto of a no-tax-hike state budget and paints his record-setting tax-and-spend plan as a reasonable alternative.
Simultaneously, voters are inundated with TV and radio attack ads and mailers urging support for Wolf’s tax increases. America Works USA—a union-funded special interest group affiliated with the Democratic Governors’ Association—has paid for most of these commercials.
But Wolf’s public relations tour and the ad campaigns aren’t telling voters the truth about the budget impasse or Wolf’s tax proposal.
For starters, Wolf and his allies tout that his plan to tax natural gas is “for the kids”—that is, to fund public schools. But Wolf’s severance tax isn’t earmarked for education. Instead, it would provide corporate welfare handouts to alternative energy companies and fund other pet projects, before schools get one cent.
The ads also claim the budget Wolf vetoed “fails to fund education.” In reality, that budget would have raised education spending by $370 million, increasing state aid to public schools to $10.4 billion—a new record high.
As Wolf fights for his severance tax in the name of “the kids,” almost all (97 percent) of his proposed tax hikes next year come from sales and income taxes, not the severance tax.
These higher sales and income taxes mean working families—poor and middle class alike—would pay more. Wolf’s plan to expand the sales tax to 45 additional goods and services would take another $3 billion annually from Pennsylvania taxpayers.
Wolf would tax seniors for nursing care and home health care, young parents for day care and diapers, college students for meal plans and textbooks, and the bereaved for funeral expenses. As if families aren’t struggling enough, Wolf seems intent on taxing people at their most vulnerable.
If you think that sounds like an unpopular idea, you’re right. When the state House of Representatives held a vote on Wolf’s tax proposal, it received zero votes—even from Democrats.
On his “Schools That Teach” tour, Wolf continues to claim we must “restore the cuts to public schools.” Done. Mission accomplished. School district funding reached a record high last year at $26.1 billion—a $1 billion increase over the last four years. We rank in the top 10 states in the country, spending $3,000 more per student than the national average. Pennsylvania schools are hardly underfunded.
It’s true the state funding formula must be fixed so tax dollars go where they are most needed. But Wolf didn’t hesitate to veto a bill that would have created a new, fairer student-based funding formula.
And the Wolf administration insists the governor is sticking to the tax-hike plan he proposed in March, even though abandoning his draconian sales and income tax increases would go a long way towards budget compromise.
Finally, Wolf and his supporters tout the claim that gas drillers are “let off the hook,” as though they pay no taxes now. But gas drillers already pay an “impact fee”—really a tax—of more than $200 million per year. That’s on top of $300 million paid since 2009 in other state taxes (the taxes common to other businesses) and $7 billion in royalty payments to land owners.
In the name of “fairness,” Wolf would make poor and middle class families pay more for their heating and electric bills. Indeed, Pennsylvania families earning less than $100,000—the very families Wolf claims he wants to help—would pay $180 million more in utility costs as a result of Wolf’s severance tax, according to the Independent Fiscal Office.
Workers would feel pain, too. Range Resources, the fourth-largest shale gas producer in Pennsylvania, just announced an 11 percent reduction in its workforce due to low gas prices. This follows layoffs at Chevron, Consol Energy, and Halliburton, among others.
Another tax will only cost more jobs and drive investment away faster.
No matter how many miles Wolf puts on his Jeep traveling the state, or how many TV ads out-of-state interest groups fund, the fact that the governor’s tax plan hurts working families won’t change.
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Nathan A. Benefield is vice president of policy analysis for the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.