Does the governor’s budget go overboard?
Local state Rep. Pete Daley called the budget proposal of Gov. Tom Wolf, a fellow Democrat, a “very, very, very aggressive” proposal. And that might be an understatement.
Daley was enthusiastic about what he called a “grand slam to ask the Legislature to come up to the plate,” but others, even some in the governor’s own party, were either noncommittal or downright critical of the spending plan.
It’s certainly understandable folks in the Legislature would have strong reactions to the Wolf budget, mainly because the governor seems to be interested in taxing anything that isn’t nailed down, and raising taxes on pretty much everything that’s already being taxed.
Among other things, the governor wants to boost the state income tax rate by more than 20 percent, from 3.07 percent to 3.7 percent, and raise the state sales tax by 10 percent, from 6 to 6.6 percent. And the sales tax, under Wolf’s proposal, would be expanded to items it never covered before. Here’s a partial list: candy and gum, hygiene products, non prescription drugs, cable TV, legal services, garbage collection, home health care, magazines, caskets and, yes, even newspapers. He’s also proposing a massive increase in the tax on cigarettes and, for the first time, would collect taxes on cigars and smokeless tobacco.
Those taxes and others, along with Wolf’s proposed extraction tax on natural gas drilling, would raise more than $4 billion. The governor wants to return some of that to Pennsylvania’s citizens in the form of property tax relief, and he claims the tax burden on the average middle-class homeowner would decline by 13 percent if all his proposals were to be enacted. There are a lot of numbers to be crunched, and until they are, color us skeptical that most of us in the state would see a net gain.
It’s not that the governor is without positive ideas on how to use the additional revenue he seeks.
He wants to spend nearly $1 billion more on education, and it’s hard to argue with that sort of investment. He also wants to boost spending for water and sewer projects. Again, no problem with that. He offers a plan to borrow $4 billion-plus to refinance pension debt, and would provide added funds for business loans and clean energy subsidies. He’s even proposing to cut the state’s business tax in half over the next few years, something he no doubt felt would appeal to Republicans in the Legislature.
We suspect it’s going to be difficult for the governor to win public support for his package as a whole. Certainly, people will be attracted by the idea of a reduction in their property taxes, but when they look at the size of the proposed income and sales tax increases, their eyes may bug out. People generally don’t like the idea of their paychecks getting smaller and their bills at the store getting bigger.
As the governor and legislators prepare to do battle over the budget, there are a couple of items on our “wish list.”
First, we hope Republicans, as a condition for granting the governor some of what he wants, will demand Wolf accept a plan to privatize the state liquor and wine monolith and reap the financial rewards from selling licenses to private interests.
Also, we’d like to see the Capitol complex surrounded with concertina wire that will not be pulled down until lawmakers and the governor enact meaningful legislation to address the fiscal disaster being caused by the state pension system.
Wolf did not hold back from making a bold statement with his first budget address. We believe he’s a smart enough man to realize he’s not going to get all he wants, maybe not even most of what he desires.
Our hope is he and legislators can work together, reach reasonable compromises and ultimately come up with a package that will be beneficial for the state and its people.
After all, that’s their job.