Tax hikes: Wolf’s white whale
Have a spare $1,000 lying around? If so, you’d probably make a mortgage payment or buy several weeks of groceries. You might even sock it away in your 401(k) or kid’s college fund. But at a recent vote in Harrisburg, House lawmakers at Gov. Wolf’s urging decided whether that money should be plucked out of your pocket and spent on their priorities, not yours. And they rejected his plan.
It was the latest in a long line of political gimmicks aimed at reeling in Wolf’s white whale: paradigm-shifting tax increases on Pennsylvanians already shouldering the 10th-highest state and local tax burden in the country.
Wolf’s September spending plan would force a $1,000-per-family tax increase and result in the loss of 14,000 jobs. In a “compromise” from his original proposal, Wolf dropped any pretense of property tax relief or of lowering Pennsylvania’s sky-high corporate rates.
So, what’s the real roadblock in the budget debate? Ask anyone from the Wolf administration, and they’ll point to education funding as the sticking point. Wolf claims to have “worked hard to compromise” only to be “met with obstruction” from legislative leaders.
Pesky as they are, the facts tell a different story.
In fact, the vote came after Wolf vetoed emergency funding legislation that would have eased the painful financial pressure on schools and service providers dependent on state dollars. Why would Wolf withhold funding from the likes of cancer screening, domestic violence programs, and school transportation?
In truth, the House and Senate have offered Wolf a series of concessions particularly on education funding only to be met with fierce resistance from the administration. It is, in fact, Wolf’s laser-like fixation on tax increases that obstructs agreement on a state budget.
Consider the timeline of events since Wolf’s inauguration. Although Pennsylvania already spends more than $15,000 per student each year, Wolf’s signature campaign pledge was to increase state aid to public schools. In his March budget address, he requested an additional $400 million in basic education funding, along with a bevy of tax hikes on everything from diapers to daycare to funeral services. Wolf’s budget featured higher tax increases than the combined total of all other 49 states.
In June, the House and Senate agreed to a no-tax-hike budget that increased basic education by $100 million and set a new record-high in public school funding. Was it everything Wolf asked for? No; but it was a reasonable compromise from a legislative body tasked with responsibly navigating important state needs.
Wolf promptly vetoed this bill containing record education spending and a fair funding formula that has been universally applauded as sensible public policy.
Weeks later, legislative leaders presented the governor yet another compromise: The House and Senate would meet Wolf’s request for $400 million in new education spending, contingent on modest pension reform and liquor privatization. Notably, this proposal continued to shield working Pennsylvanians from painful tax increases.
Again, Wolf rejected the offer. A budget without tax hikes would not suffice-even one that provided every dime the governor requested for basic education.
What may have begun as a quest to boost public school funding clearly has morphed into an obsession with higher taxes. $100 million in new education funding? $400 million? Unless it’s accompanied by the largest tax increase in state history, it’s not good enough for Wolf.
While Wolf likes to claim his tax hike on natural gas drillers would provide revenue for local school districts, his severance tax is not actually dedicated to public schools. Instead, it’s earmarked for “alternative energy subsidies” and other carve outs for corporate welfare before schools get one cent. Not to mention the vast majority of Wolf’s new tax hikes comes from working families, not the gas industry.
Leading up to the tax vote, the governor has rejected offer after offer that would increase school spending to record levels-yet Wolf insists education funding is standing in the way of a state budget. In a Monday morning press conference, Wolf even declared “If I lose, Pennsylvania loses.”
The truth is, Wolf’s “loss” for his tax scheme will save Pennsylvania families $1,000. Wolf’s unrelenting fixation on tax hikes is the real culprit for Pennsylvania’s three month-long (and counting) budget standoff.
Paul is a senior policy analyst for the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.