What to watch for in Pennsylvania governor’s budget proposal – CBS Philly
HARRISBURG, Pa. (AP) — Gov. Tom Wolf will present his eighth and final budget proposal to lawmakers on Tuesday, as the Democrat pushes Republicans to spend more federal pandemic aid now and Wolf seeks to cement his legacy of public school by getting a big increase in state aid.
State bank accounts are teeming with cash and Wolf, who is constitutionally required to leave office next January at the end of his second term, boasts that he is the only governor since Dick Thornburgh in 1987 to leave a surplus cash to his successor.
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However, the bullish spending plans of Wolf and his fellow Democrats in the Legislature are being pushed back by Republican lawmakers.
Otherwise, Wolf has seen huge swaths of his agenda thwarted year after year by large Republican legislative majorities, including billions of dollars in tax increases that Wolf had touted as necessary to prop up state finances and restructure a school financing system that disadvantages the poorest. public schools.
Two years of dealing with the pandemic and its aftermath have also undermined Wolf’s program, though massive amounts of federal aid and a federal grant-fueled economy have erased entrenched state government deficits, at least temporarily.
Details of Wolf’s budget plan for the 2022-23 fiscal year beginning July 1 remain under wraps, but he has made it clear that funding public schools is his top priority.
Here are five things to watch out for when the governor’s plan is released on Tuesday:
Wolf will almost certainly come up with an operating budget that significantly exceeds the approved plan of $38.6 billion this year for state dollars. For starters, the state needs to fill the void left by about $4 billion in federal pandemic aid that covers some Medicaid bills this year, plus Wolf wants more help for schools and Pennsylvania’s aging population is accelerating. Medicaid costs.
The good news is that tax revenues are far exceeding expectations, thanks to robust consumer spending, and a multi-billion dollar surplus is expected. This is in addition to the remaining $2.2 billion from the US bailout signed by President Joe Biden last March and another $2.9 billion in the state budget reserve.
In Pittsburgh last month, Wolf gave an overview of his budget outlook. The state’s financial stability is the result of smart investments that must continue and it must “seize the moment” while in a position of strength, he said.
“We must continue to make generational investments that will put Pennsylvania on the path to prosperity for years to come,” Wolf said. “What I’m going to say in my budget speech in a few weeks: ‘we have to pay our bills’.”
These bills will include what Wolf calls “fully funded” public schools under the state’s current funding formula. Last year, Wolf requested an additional $1.3 billion, a 20% increase, to do so. He settled for $300 million, still a substantial increase.
Other priorities could be increasing reimbursements for direct care workers who care for the elderly and disabled under Medicaid, but who are hard to find and keep. And — given the failure of a bridge in Pittsburgh last month — he may seek to shift fuel tax money from the state police budget to highway and bridge work.
Wolf and Democratic lawmakers also want to direct $1.7 billion in federal aid for workers, the health sector, environmental programs and a one-time property tax subsidy for low-income homeowners and renters.
Given the state’s large cash cushion, Wolf seems unlikely to propose an increase in state income or sales taxes, the state’s two main sources of revenue.
He could again argue for a tax on production from the prolific Marcellus Shale natural gas reservoir. It has done so every year, only to be blocked by industry allies in the Legislative Assembly.
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Wolf and Republican lawmakers, however, could try to negotiate another of the governor’s longstanding goals: to cut the net corporate tax rate by 9.99%, one of the second highest in the nation.
Wolf set out in 2015 to erase funding disparities between rich and poor neighborhoods and bring the state’s share of public school costs to about 50 percent. His most ambitious proposals failed, but he still increased spending on public schools — including early childhood education and special education — by $2 billion, or about 30%.
This year he will probably have another big request.
Top Democratic lawmakers, backed by allies in the teachers’ unions, have launched a request for $3.75 billion, including $1 billion in federal aid primarily to improve school buildings.
When asked if the governor supported him, Sen. Vincent Hughes, D-Philadelphia, said Wolf indicated a “very strong interest in what we’re offering here.”
Republican majorities in the House and Senate have remained firm that federal pandemic aid and state reserves be used prudently to avoid deficits.
The state’s good fortune is temporary and its long-term fiscal position is worrisome, they say.
“The Governor and Democratic leadership proposals were crafted in a fiscal fantasy land where concern for future fiscal years apparently does not exist,” House Republican leaders said in a statement.
Pennsylvania is in an ideal position to collect taxes from a state that has weathered stubborn deficits since the recession more than a decade ago.
Its stakes are important.
Pennsylvania is a relatively slow-growing economy, to begin with. On the other hand, its retirement-age population is swelling and its working-age population – which has to pay expensive health care bills for the elderly – is shrinking.
He also has a $900 million unemployment compensation debt to the federal government left over from the pandemic.
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