AP Story Errs on Wolf Spending Plan

A recent Associated Press story questions part of our analysis of Tom Wolf’s education spending and income tax proposals, specifically the notion that Mr. Wolf would have to double or almost triple the rate to fund $4.6 billion in additional spending.

Wolf has said he would not use the income tax alone to raise that new money. His other proposals include imposing a 5 percent severance tax on Pennsylvania’s thriving natural gas industry and closing business tax loopholes.

We welcome critical review of our work, and will admit to any errors in our analysis. However, we did not overlook these details as the AP story claims. 

First off, our analysis did account for Wolf’s proposed natural gas tax, which his campaign estimates would raise about $1 billion.

But this $1 billion estimate is before replacing the revenue already generated by the impact fee (which Wolf has indicated he plans to do). Wolf’s “Fresh Start” plan also indicates that severance tax revenue would be used for more than education. He plans to use some of the revenue for “infrastructure” and “development of clean energy alternatives.”

In addition, our analysis lists 18 additional spending proposals in Wolf’s Fresh Start plan, which are not paid for with any new revenue streams. The cost of just one of these initiatives—universal preschool—would exceed $1 billion. Our assumption that the total cost of these proposals, if enacted, would equal the remaining severance tax revenue after replacing the impact fee and funding infrastructure and clean energy, is extremely generous.

Second, while Wolf does propose “closing business tax loopholes,” he plans to use this revenue in other ways. Wolf’s Fresh Start plan says closing loopholes and tax incentives would be used strictly to lower the Corporate Income Tax rate:

By implementing combined reporting and tax credit reforms, Tom Wolf will be able to lower the corporate income tax rates for Pennsylvania’s small businesses, which struggle to pay their taxes under the current system.

Wolf’s plan also calls for the retention or creation of business tax credits that are “tied to the creation of good paying, middle-class jobs.” 

Our analysis of Mr. Wolf’s proposals is thorough, generous and as detailed as possible. Yet the AP characterized our estimates as, “hypothetical analyses whose value is mainly political.”

In short, our research and analysis more accurately represents Wolf’s proposals than the AP story.