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What to See in Pennsylvania Governor Tom Wolf’s Budget Proposal – CBS Pittsburgh

HARRISBURG. increase state aid.

State bank accounts are awash with cash, and Wolf, who is required to leave office in January until his second term ends, is touting himself as the only governor since Dick Thornburgh in 1987 leaving a cash surplus to his successor.

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However, plans to increase spending by Wolf and his Democrats in the Legislature are receiving opposition from Republican lawmakers.

On the other hand, Wolf has seen large portions of his agenda thwarted year after year by major Republican legislatures, including the billions of dollars in tax increases that Wolf introduced when needed to support the state’s finances and restructure the school funding system to the detriment of the poorest public schools.

Two years of dealing with the pandemic and its aftermath have also dented Wolf’s agenda, although massive amounts of federal aid and a federally subsidized economy have wiped out the administration’s deficit. state, at least temporarily.

Details of Wolf’s budget plan for the 2022-23 financial year starting July 1 have yet to be announced, but he has made it clear that funding public schools is his top priority.

Here are five things to look out for when the governor’s plan is announced on Tuesday:

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Expendables

Wolf will almost certainly propose a spending operating budget above the $38.6 billion state plan approved this year. To start, the state must fill the gap left by about $4 billion in federal pandemic aid that is paying for several Medicaid bills this year, plus Wolf wants more aid for schools and Pennsylvania’s rapidly aging population is accelerating Medicaid costs.

The good news is that tax collection is outperforming expectations, thanks to strong consumer spending and a billion-dollar surplus expected. This is more than the $2.2 billion left over from the Rescue Americans Plan signed by President Joe Biden last March and another $2.9 billion in state budget reserves.

In Pittsburgh last month, Wolf gave a preview of his budget outlook. The state’s financial stability as a result of smart investments must continue, and it must “seize the moment” when it is in a strong position, he said.

“We need to continue to make generational investments to put Pennsylvania on a path to prosperity for years to come,” said Wolf. “What I will say in my budget address in a few weeks: ‘we need to pay our bills.'”

Those bills would include what Wolf calls “full funding” of public schools under the current state funding formula. Last year, Wolf sought an additional $1.3 billion, or a 20% raise, to do so. Britain settled for $300 million, still a significant increase.

Other priorities might be increasing reimbursement for direct care workers serving the elderly and disabled under Medicaid, but it is difficult to find and keep. And – with a bridge in Pittsburgh breaking down last month – he could be looking to move fuel tax money out of state police budgets and into highway and bridge construction.

Lawmakers Wolf and Democrats also want $1.7 billion in federal aid for workers, the health care sector, environmental programs and a one-time property tax subsidy for homeowners and lower income tenants.

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TAX

Given the state’s large cash reserves, Wolf does not appear to be proposing an increase in state income or sales taxes, the two main sources of state revenue.

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He may again favor a production tax on the prolific Marcellus Shale natural gas reservoir. He did so every year, only to be blocked by industry allies in the Legislature.

However, Wolf and Republican lawmakers may be trying to land a bargain on one of the governor’s longstanding goals: reducing the corporate net income tax rate to 9.99%, one of the nation’s second highest.

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EDUCATION

Wolf set out in 2015 to close funding disparities between rich and poor counties and bring the state’s public school expense ratio to about 50%. His most ambitious proposals failed, but he still increased spending on public schools – including early childhood and special education – to $2 billion, or about 30%.

This year, he will likely have another big request.

Top Democratic lawmakers, backed by allies in the teachers union, made a request of $3.75 billion, including $1 billion in federal aid. essential to improve school buildings.

Asked if the governor would support it, Sen. Vincent Hughes, D-Philadelphia, said Wolf was “very interested in what we’re offering here.”
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REPUBLIC

Republican majority in the House and Senate remain adamant that federal pandemic aid and state reserves are used judiciously to avoid deficits.

They say the state’s fortunes are temporary and its long-term financial condition worrisome.

“Proposals by the governor and Democratic leaders have been developed in a land of financial fantasy, where concerns about future fiscal years seem non-existent,” the Republican leader in the House of Representatives said in a statement.

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HEADQUARTERS

Pennsylvania is well positioned to collect taxes for a state that has weathered a tough deficit since the recession more than a decade ago.

Its challenges are substantial.

Pennsylvania is a relatively slow growing economy. For another country, the retirement-age population and working-age population balloons – which pay for expensive health care bills for the elderly – shrink.

It also has $900 million in unemployment compensation debt to the federal government left over from the pandemic.

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https://pittsburgh.cbslocal.com/2022/02/06/tom-wolf-budget-proposal/ What to See in Pennsylvania Governor Tom Wolf’s Budget Proposal – CBS Pittsburgh

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