Wolf’s Final Budget, Like His First, Features Public Schools

In addition to spending more than $1.5 billion to wipe out deep funding disparities between the poorest and wealthiest public schools, Gov. Wolf wants to increase reimbursements for direct care workers and marshal more money to qualify Pennsylvania for new federal highway and bridge funding.

HARRISBURG — Gov. Tom Wolf’s eighth and final budget proposal unveiled Tuesday would push state spending past $43 billion for the first time, as the Democrat asks lawmakers for the biggest-ever increase in aid for public schools, plus more money for direct care workers, higher-education institutions and college scholarships.

Wolf delivered the $43.7 billion proposal to lawmakers before he was to address them in a joint session of the House and Senate at 11:30 a.m.

A hallmark of the Democrat’s tenure in office has been a campaign to wipe out deep funding disparities between the poorest and wealthiest public schools, and he is again hoping to persuade the Republican-controlled Legislature to approve a large increase, more than $1.5 billion.

In addition to public schools, Wolf wants to increase reimbursements for direct care workers who serve the elderly and disabled under Medicaid and marshal more money to qualify Pennsylvania for new federal highway and bridge funding.

State universities and scholarship programs also would get substantial new sums. 

Republican lawmakers, however, have long been leery of Wolf’s proposed spending increases, and have pushed for more conservative budgeting. 

In remarks afterward, Sen. Pat Browne, (R-Lehigh), who heads the Appropriations Committee where the budget debate will play out in the coming months, cautioned that Wolf’s plans masked a structural financial deficit that will present a growing challenge for state government in the coming years.

Wolf’s budget proposal numbers, Browne said, “do not reflect reality.”

The state’s bank accounts are flush from an economy juiced with federal pandemic subsidies, and a multibillion-dollar surplus is projected when the 2022-23 fiscal year starts on July 1.

Most of Wolf’s budget proposals have revolved around a large tax increase. However, given the state’s cash cushion, Wolf is proposing no change to state income or sales taxes, the state’s two main sources of income.

All told, Wolf’s plan increases spending through the state’s main bank account to $43.7 billion, or about 13% higher than this year’s enacted budget of $38.6 billion.

However, federal pandemic aid has reduced the state’s reliance on Pennsylvania tax dollars this year. Counting $3.5 billion in federal pandemic aid, spending on state operations is projected to be about $41 billion in this fiscal year.

House Democratic Leader Joanna McClinton of Philadelphia said the state’s strong tax revenues and positive bank balance presented an opportunity.

“It’s all about investing in people, funding our schools so that property taxes go down and making Pennsylvania a more business-friendly commonwealth,” she said.

In his address, Wolf’s speech said it is time to fulfill the promise of equitable public school funding, a major commitment that the state can afford to meet right now.

“This is one of those cans it would really be easy to kick down the road,” Wolf said. “We could make it someone else’s problem, we could leave it for another governor or another legislature to figure out. But we know better. We know that putting off the inevitable is not solving the problem. The truth is, the longer we go without paying this bill, the more it’s going to end up costing us.”

Sen. Vince Hughes of Philadelphia, the ranking Democrat on the Appropriations Committee, said he was heartened by Wolf’s continued focus on education spending.

“I think the big news today is the education funding,” Hughes said. “I think the big news today is that we have the surpluses available to us to pay for it.”

Wolf also called for an increase in Pennsylvania’s rock-bottom minimum wage — something Republican lawmakers have resisted since he took office in 2015 — and to cut corporate taxes by walking Pennsylvania back from its 9.99% tax rate on corporate profits, second-highest in the nation.

Wolf, who is constitutionally required to leave office next January when his second term ends, is touting himself as the only governor since Dick Thornburgh in 1987 to leave a cash surplus to his successor.

Still, much of the surplus will be necessary to pick up the slack left by roughly $4 billion in federal pandemic aid that is footing state Medicaid bills this year.