Writing Pennsylvania’s next chapter
In his fourth budget address, Gov. Tom Wolf challenged lawmakers to write “a story about a brighter future we can build together.” Nice rhetoric, but the truth is, the strides Pennsylvania has made in recent years have come despite Wolf’s opposition, not because of his support.
Public pension reform is a primary example. While Wolf signed a bill last year that began to address the pension crisis, he did so after vetoing a similar measure in 2015. Likewise, Wolf vetoed liquor store privatization, but later allowed more modest reforms. And in his first three years, Wolf demanded more in taxes from Pennsylvanians-a whopping $1,400 per family in his first budget, then $850 in his second, and $315 last year.
In these and other areas, Wolf did not spearhead progress, he obstructed it and watered it down-and the cost of inaction is high. Last year, Pennsylvania lost 500 people per week to other states, while our unemployment rate remains higher than the national average. Since 1991, Pennsylvania ranks 46th in both job and personal income growth.
There is no time to waste to get our state back on track.
But for the eleventh time since taking office, Wolf is seeking takes hikes-this year on the 2.7 million households using natural gas to heat their homes. This new energy tax comes on top of the taxes gas drillers currently pay. Pennsylvania’s drilling sector has already lost 15,000 jobs since 2015. Another tax won’t bring them back, and will kill even more jobs.
At the same time, Wolf proposed nearly $3.3 billion in additional spending across all funds. Tax and spend-sound familiar?
Here’s a better way to write a new chapter in Pennsylvania’s story. For our kids to pursue careers and raise families in Pennsylvania, we must make our state a destination for job creators. That means improving our tax climate. After federal tax reform, dozens of Pennsylvania companies offered pay raises and new investment plans.
We can replicate that success with state-level reform.
Wolf rightly called for lowering our 9.99 percent corporate tax rate, but his long phase-in period is too slow. This reform needs to happen quickly and without making tax compliance more complicated.
We also need to turn the page on state government’s addiction to overspending.
Limiting spending increases to inflation and population growth, a reform outlined in the Taxpayer Protection Act, will allow reasonable growth in government while preventing overspending. Spending smarter, not just more, will keep money in families’ pockets where it belongs.
Our education system deserves its own chapter in this story. We can all agree with Wolf that policies should ensure “your zip code doesn’t determine what kind of education you can get.” Yet despite spending more than $16,000 per student, far too many kids are being left behind. It’s time to promote true education equality by empowering parents with options.
To make that vision a reality, lawmakers should expand the popular Educational Improvement Tax Credit and allow parents to customize their child’s education by creating Education Savings Accounts (ESAs).
ESAs offer parents flexible spending accounts, funded and administered by the state, to pay for approved educational services, including tutoring, private school tuition, online courses, and textbooks. This innovative policy gives parents control over their child’s education at a fraction of the cost of traditional public schooling.
Plus, school districts would keep local funding for a student who withdraws to take advantage of an ESA, allowing schools to reduce class sizes and spend more money per student.
Continuing our progress on criminal justice reform must also be part of our story. As Wolf noted, last year our prison population declined for the fourth straight year while crime decreased. It’s time to build on this success by enacting a second round of criminal justice reforms to control costs and make Pennsylvanians safer.
Lastly, we must ensure Pennsylvanians can write their own stories-stories of income growth and of achieving independence. But our welfare programs are trapping them in poverty. Lawmakers should pass reasonable work or community engagement requirements proven to help individuals gain job experience and become self-sufficient.
To truly write a new chapter in the commonwealth’s story, we must move beyond the tax-and-spend policies of the past and turn Pennsylvania into a state of opportunity for all.
Mitchell is president and CEO of the Commonwealth Foundation, Pennsylvania’s free-market think tank.