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Gov. Tom Wolf came in like a lion today when he unveiled his first budget that would change Pennsylvania’s tax system, provide for billions of dollars in new funds to public education and tie booze to the pension system.
It was a bold budget to say the least, but remember: budgets drafted by governors never pass as originally proposed, and with the state General Assembly’s status as Republican-controlled, Wolf’s budget will likely look very different by July. Here’s a rundown of what matters for you:
1. Decreased property taxes and wage taxes means savings for Philadelphians
Wolf proposed a decrease in property taxes across the state, largely because of an increase in cash being sent to local schools. (In Philadelphia, property tax relief will be felt more in high-poverty districts.) And if you’re a renter and earn $50K per year or less, you’d be eligible under Wolf’s plan for a $500 renter’s rebate. According to Philly.com, residents in the city would also see about a half-a-percent reduction in wage tax (3.92 percent to 3.48 percent) while nonresidents who work in Philly would see a similar decrease (3.49 percent to 3.11 percent).
2. Liquor modernization means better state store hours
Wolf has proposed tying the state’s pension system — which is essentially $50 billion in debt — to liquor “modernization.” Democrats opposed the privatization of the state liquor system that would allow booze to be sold in grocery stores, but many of them do support efforts to bring in additional revenue like expanding state store hours, adding more state store locations based on customer need and allowing for booze delivery into the state.
3. Tuition freezes at state and state-related schools
Wolf promised to restore half of the cuts made to higher education if universities freeze their tuition next year. In monetary terms for the schools, it works out to an extra $1.7 billion, a 9.9 percent increase in funding for 2015-16 compared to 2014-15. The state-related public universities, Penn State, Temple, Lincoln and Pitt, would each get somewhere between $100 and $300 million, with Penn State getting the most.
4. Basic education funding increased to 50 percent
One of the highlights of Wolf’s budget proposal was the increase in funding to K-12 education, which he claims would bump up state funding to public schools from about 30 percent to 50 percent. That would spell an influx of $160 million for the School District of Philadelphia.
5. Minimum wage increase from $7.25 to $10.10
Included in Wolf’s budget proposal is a statewide increased in minimum wage from the now-federally-mandated $7.25 to $10.10. The call from Wolf for higher wages for low-income workers is no surprise, but he’ll have trouble passing this one through the Republican-controlled legislature. The chambers of commerce in both Philadelphia and Pennsylvania have staunchly advocated against raising the minimum wage; they say it’ll mean less revenue and fewer jobs. Workers in Philadelphia will have to wait to see what the city does — City Council is holding a hearing tomorrow regarding raising the minimum wage here to $15 an hour.
6. Smokers lose out — again — with a cigarette tax increase
Gov. Wolf proposed a $1-per-pack cigarette tax increase statewide. Philadelphia would probably be exempt from this after lawmakers voted in September to increased cigarette taxes in the city by $2 per pack to fund the ailing education system. Still, if you travel outside of the city to get your smokes, you’ll be running low on options.
7. Environmentalists get a win with a natural gas extraction tax
Another non-surprise here: Included in Gov. Wolf’s budget proposal was a 5 percent severance tax to be levied against natural gas companies in Pennsylvania, a move that will have an especially large impact on the Marcellus shale-rich western part of the state. Environmental activists have long called for the severance tax, but the previous governor, Gov. Tom Corbett, refused to tax the companies. The funds brought into the state from that extraction tax will be tied to education, which the group Pennsylvanians Against Fracking has already derided as an unsustainable solution to funding the state’s public schools.
8. LGBT non-discrimination laws
While nothing in the budget itself called for this, Wolf made mention in his budget address of creating non-discrimination laws for lesbian, gay, bisexual and transgender workers who, under state law, can still technically be fired for their sexual orientation.
Here’s a full copy of Wolf’s budget, if you have a lot of time on your hands and are into reading 1,000 pages worth of dense budgetary material: