New Pennsylvania Gov. Tom Wolf will unveil his first proposed state budget next week while he’s looking at a more than $2 billion statewide deficit and, oh yeah, a Republican-controlled Congress that’s less than stoked to work with a Dem.
Budget day is an insane one in Harrisburg, and Wolf’s first major proposal is sure to gain attention. He’s vowed to bring in more money for things like schools and basic education, but onlookers wonder where he’ll get the cash money from.
Here’s what you need to know:
What: Tom Wolf will make an address and release his first budget
When: Tuesday at 11:30 a.m. (and you can check out a livestream here)
Where: The Capitol building in Harrisburg
What’s it mean for Philly?
That depends. Mayor Nutter will also unveil his budget plan for the City of Philadelphia next week, but far less surprises are expected from him. The biggest way the state budget can affect the city is in the education sphere: The School District of Philadelphia receives about a third of its funding from the state, and Wolf has promised to dedicate increased state funds to basic education.
Last year’s state budget was a big win for Philadelphia schools after the state passed a $2-per-pack cigarette tax in the city that would bring in $80 million for the district in the first year alone. But this year, there’s unlikely to be a second cash infusion like that.
What’s expected in the budget?
Tax cuts! Wolf said during his campaign that he wanted to reform the school property tax system, and reform he will try. Published reports indicate that Wolf will seek a 50 percent cut in school property taxes for residents across the state.
But what might be even more significant for Pennsylvania is Wolf’s plan to slash corporate taxes. Company executives in the state likely rejoiced, as Wolf has signaled he’ll effectively halve those taxes by 2018, taking the rate from 9.99 percent to 4.99 percent.
What’s that 5 percent savings on net income tax mean? Companies will save big. An example: Comcast could stand to save $100 million every quarter.
Isn’t he going to need, uh, money to pay for that?
Tax hikes! Republicans are already kinda freaking out at the prospect that Wolf is looking at significantly raising some of the state’s taxes, namely the sales tax. He’ll likely propose a sales tax increase from 6 percent to 6.6 percent that would also expand what’s taxed to clothing and professional services. In addition, he’s also expected — according to KDKA — to propose a 1 percent increase in personal income taxes, taking it from 3.07 percent to 4.07 percent.
And we already know that Wolf will seek a 5 percent severance tax to be levied against the state’s natural gas drillers, who have largely gotten by unscathed as the last governor was an ally of the industry. Not any more. Wolf wants that estimated $1 billion a 5 percent tax would bring in, especially from the Marcellus Shale-rich western part of the state.
We also know that Wolf’s administration has basically found $109 million in savings across government agencies. While he didn’t specify what cuts would be made to save that cash, he noted that it’s been done through making government “work more efficiently.” Alright — usually that means, you know, firing people.
What else will be in the budget?
At this point, it’s hard to say. Remember: Tom Wolf is a successful businessman. And while progressive Democrats want to see him tackle saving the state’s education system in his first budget, he’s said his first priorities are job creation and creating a better business climate to spark economic development. So those initiatives are largely what he’s revealed so far.
We’ll have to wait until Tuesday to be certain about the rest, but as a reminder, this is where Wolf stands on issues relevant to young Philadelphians. Some campaign promises he made that could be in the budget:
1. He wants to establish a Technical Education Applied to Manufacturing (or T.E.A.M.) to be dispatched to high schools across the state to improve vocational education programs.
2. Wolf has said he wants to establish a Fair Funding Formula for Pennsylvania schools that increases funding for schools from 32 percent to 50 percent.
3. He wants to implement programs for veterans and underserved communities by providing financial support and application fee waivers for high school students with a GPA over 3.75.
4. Wolf plans to funnel more money into the Department of Environmental Protection and expand the use of clean energy.
What happens after Tuesday?
The fun part. Wolf’s first budget plan is likely going to hold a lot of changes for the state — changes that its Republican-run Congress is not going to like a whole lot. Budgets never pass as they are proposed by governors, so after Tuesday, the deal-making will begin.
Wolf will have to prioritize was he *really* wants out of his first budget, which won’t be passed by legislators until June or July. Those representatives and senators who run the show in the legislative branch have things they want done, too: Liquor privatization, tax cuts, pension reform, the list goes on and on.
They’ll ask for something in return, and you can bet the budget that passes this summer won’t look like the one Wolf will propose tomorrow. Now, it’s a waiting game.