DV Journal

Pennsylvania Gov. Tom Wolf introduced his final state budget plan in February.

He proposed $45.7 billion to increase general fund spending by $4.5 billion—a nearly 11 percent hike. Wolf made the argument that the state should increase spending on education by $1.55 billion, especially in poorer school districts.

His plan includes increasing the minimum wage, workforce development, veterans’ services and suicide prevention, and funding for environmental programs.

Wolf, a Democrat, recently asked the legislature to give Pennsylvanians $2,000 per household.

“The cost of everything from gas to groceries is a little higher right now than it was just a few weeks ago and for Pennsylvanians living paycheck to paycheck even a small increase in expenses can mean painful decisions like paying for food or rent,” said Wolf. “I see that pain in communities across Pennsylvania and I want to talk about solutions. I want to put $2,000 checks into the hands of Pennsylvanians and families that need it.”

However, Independent Fiscal Office (IFO), the nonpartisan financial watchdog, warned Pennsylvania could face as much as a $1.8 billion deficit by June 2024.  And now the U.S. economy may be on the brink of a recession.

The deadline to adopt the budget is midnight June 30. But the issue of whether or how much of the $6 billion surplus and $1.7 billion pandemic relief funds to spend is a sticking point. Negotiations between Wolf and the Republican-led legislature are continuing.

“During the last three weeks of June we hope to finalize the 2022-2023 budget,” said Sen. Bob Mensch (R-Berks/Bucks/Montgomery). “While the governor seems intent to spend the state into debt, I and my Senate Republican caucus are determined to be fiscally responsible and we will fund our next budget without creating future debt, and thus avoid the future tax increases the governor’s proposal definitely create.

“In a time of hyperinflation and a pending recession, it would be irresponsible to create future economic chaos with a spendthrift budget.”

Rep. Chris Quinn (R-Media) agrees with the governor that more needs to be spent on public education.

“We must make another record-setting investment in public education, as we have in each of the last several years,” said Quinn. “There are learning deficits due to the COVID-related school closures that must be addressed if our kids are going to be prepared for success. With families challenged by runaway inflation, increased energy costs, and skyrocketing gas prices, we must craft a budget that does not further burden hardworking taxpayers.

“Finally, I’d like to see Growing Greener III be considered. Sponsored by Rep. Lynda Schlegel Culver (R-Northumberland/Snyder) and myself. The legislation would invest federal stimulus funds in projects to restore and protect our waterways, preserve open space, and upgrade drinking and wastewater facilities. That targeted investment promotes job growth and activity in tourism and agriculture, our top two industries which are vital to Pennsylvania’s economic well-being.”

Rep. Todd Stephens (R-Montgomeryville) said, “I’m focused on helping restore communities devastated by last year’s tornado, continuing our record-setting investments in our schools and protecting families from the long-term impact of the out-of-control price increases we’re experiencing every day.”

“As always, my top priorities for this budget season are families, education, and economic development,” Rep. Melissa Shusterman (D-Paoli). “Our state is currently sitting on an $8.5 billion dollar surplus. It’s time to start investing that money in hard-working Pennsylvanians, and Gov. Wolf has proposed a budget that will do just that. It includes a Child and Dependent Care tax credit, to reduce the financial burden of childcare on working families and would enable parents to rejoin the workforce without worrying about how to pay for expensive care.

“Additionally, the proposed budget includes increased investment in education, which will provide much-needed property tax relief for homeowners, as well as continuing to ensure our graduates are prepared for the jobs of tomorrow. Both priorities will holistically improve our state’s economic climate which will spur more business investment and create better-paying jobs,” said Shusterman.

But Rep. Tracy Pennycuick  (R-Gilbertsville) urges caution on spending and recommends adding to the state’s savings account. Pennycuick is running for the Senate to replace Mensch, who is retiring.

“For the 2022-23 state budget, I would like to see priorities placed on additional funding for education and school security. I think we also need to dedicate more dollars to address our mental health crisis. Given the economic climate, it is vitally important we continue to put additional dollars in the state’s Rainy Day Fund to help offset any future economic downturns, as well as support our business community to bring down the cost of doing business and address inflation,” said Pennycuick.

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In his final budget address to the state legislature, Gov. Tom Wolf proposed a $45.7 billion plan to increase general fund spending by $4.5 billion—a nearly 11 percent hike.

Wolf made the argument that the state should increase spending on education.

“Refusing to fund education equitably does not save us money,” he said. “It just means we wind up spending more on social services, remedial programs, even prisons. And that calculation doesn’t even take into account the opportunity costs of failing to invest in our kids: The skills our workforce doesn’t develop, the products and services that never become a reality, the business growth and tax revenues that vanish.”

Wolf said the state’s finances were in dire straits when he took office. But working with the legislature, Pennsylvania now enjoys a $2 to $$3 billion structural surplus.

“We’ve built our rainy day fund to more than $2.8 billion,” he said.

Wolf also proposed raising the state’s minimum wage from $7.25 to $15 an hour.

Delaware Valley Republicans accused Wolf of pushing a budget that creates future deficits.

“The spending includes billions of dollars from the federal government, so he wants to spend one-time monies for recurring situations, and when you do that, you create yourself a real problem in the out years,” said Sen. Bob Mensch (R-Bucks/Berks/Montgomery). He noted Wolf’s proposed new spending comes from $2 billion in federal American Rescue Plan (ARPA) funds. If enacted, it would produce a $1.3 deficit for the 2023-24 fiscal year, when Wolf will be out of office, Mensch said.

According to the Senate Appropriations Committee budget projections, the governor’s plan would produce a $1.3 billion deficit for the 2023-24 fiscal year and create an even bigger bill for Pennsylvania taxpayers to pay long after the governor leaves office: A $13 billion deficit by 2026-27.

“While he wants to leave a legacy of no taxes, he’s leaving a terrible legacy for the future because it will only increase costs to our taxpayers,” said Mensch.

“Bigger government, higher taxes, and increased spending are what the governor has proposed today,” said Rep. Tracy Pennycuick (R-Harleysville). “That is not the type of decision-making my constituents are asking of me. I am being asked to shrink government, hold the line on taxes and invest prudently in programs and services that have proven track records.”

Rep. Craig Williams (R-Chadds Ford), however, struck a more conciliatory tone.

“I was very glad to hear the governor spend several minutes from the outset of his speech reviewing our hard work to bring the commonwealth from a budget deficit to a budget surplus,” said Williams. “He also said some very favorable things about our Rainy Day Fund, created last year by the House. We have worked very hard to get our state’s financial condition in shape. As the governor noted, running a budget surplus now gives us an opportunity to invest in programs of great concern to all of us: education, health care, including mental health and addiction, and public safety.”

“Of course, the budget he offered runs out all of the state’s surplus and puts us back into a budget deficit,” Williams said. “So, I choose to see his budget as notional or a ‘wish list.’ I am confident that we will find middle ground during the budget process to bring relief to so many who continue to suffer, especially in light of the pandemic.”

Not surprisingly, Democrats praised Wolf’s budget.

“The governor’s proposed budget is exactly what Pennsylvania needs right now,” said Sen. John Kane (Chester/Delaware). “This budget uses our strong economic position to address the issues facing our communities: a $1.55 billion increase in funding for basic education, nearly $4 million to improve our public health infrastructure, and $14 million to expand SNAP benefits for individuals in need. It finally allocates the remaining American Rescue Plan funding into programs to serve the public. And, just like he has every year, the Governor has proposed a raise to our abysmal minimum wage.”

Kane added, “We can’t work for the people without investing in the people. That means supporting access to quality healthcare, a good education no matter the ZIP code, and common-sense policies that strengthen our economy from the bottom up. I look forward to working with the governor over the next few months to pass a budget that invests in Pennsylvanians.”

The House Democratic leadership released this statement: “Governor Wolf’s sound fiscal stewardship has resulted in a historic budget surplus while making thoughtful and targeted investments in education, infrastructure, and our workforce. A budget is a statement of priorities, and once again, the governor has shown that our first priority must be investing in both our pandemic recovery and our long-time growth.

“The governor’s vision for this budget mirrors many of the ideals we’ve been fighting for that will lead to better schools, better jobs, and a better Pennsylvania. Last year we took a historic step through the Level Up initiative to provide more resources to our most underfunded schools. This year, we look forward to continuing to work toward equity for all students as we invest in their futures from pre-K through postsecondary education.”

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