HARRISBURG, Pa. – Budget analysts say the spending plan proposed by Gov. Tom Wolf on Tuesday points the way to a future that most Pennsylvanians want.
The governor’s budget would increase the state minimum wage to $12 an hour, increase funding for basic education, special education and pre-K, and raise new revenue through corporate tax reform. According to Marc Stier, director of the Pennsylvania Budget and Policy Center, it also would invest $4.5 billion in state infrastructure, with a severance tax on shale gas.
“A severance tax simply just makes sense,” he said, “particularly in Pennsylvania, where 80 percent of our gas is shipped to other states, which means the tax wouldn’t even be paid by Pennsylvanians.”
Pennsylvania is the second-largest producer of natural gas in the country, but the only state that doesn’t have a severance tax on gas. Stier said the governor’s proposal, using severance-tax revenues to pay back bonds to be sold over several years, should appeal to legislators because it provides the means to fund improvements they’d like to see in their districts.
“Really critical infrastructure investments,” he said, “such as flood control, broadband internet, brownfield redevelopment that would create space where we can grow new manufacturing jobs in our older cities and towns.”
Stier said raising the minimum wage also would generate additional tax revenue, as well as reducing state safety-net expenses such as Medicaid and lifting thousands out of poverty. He said he believes even more could be done, and could be paid for through a so-called “Fair Share” tax that would cut taxes on the poor and middle class while raising taxes on the rich. However, he added, the governor must contend with a Legislature that has a very different vision of the future.
“That limits how far he can go, certainly, in generating new revenues that would enable him to fund education and higher education, and environmental protection and infrastructure, at levels that we would like to see,” Stier said.
The 2019-2020 budget is due to go into effect July 1.
More information is online at pennbpc.org.