Wolf’s Taxing Budget

The 2015-16 fiscal year is officially underway, and with no state spending plan in place, it seems as if we are reverting to the old days of budget impasses and standoffs.

Despite the General Assembly meeting its constitutional obligation of getting a budget to the governor’s desk by the June 30 deadline — a $30.2 billion plan that included a $1 billion increase in state spending, invested more in education and didn’t raise taxes — Gov. Wolf chose to veto the measure and is sticking to his proposal that includes broad-based tax increases and nearly $5 billion in new spending.

This massive tax-increase plan failed to garner a single vote when it was brought up for consideration by the House of Representatives.

The Legislature-approved budget would have made historic state investments in education funding, including a $100 million increase to basic education. It’s important to note that Pennsylvania already invests more than $27 billion in education (in total local, state and federal funds). According to the most recent U.S. Census Bureau data, the commonwealth ranks among the top 10 states in the nation in per-pupil spending.

Clearly, Pennsylvania doesn’t suffer from a lack of dedicated education funding. What we do suffer from is the ability to ensure those education dollars are being invested in student achievement and the classroom. That’s why pension reform is so critically important.

With an unfunded liability of $53 billion, the state pension crisis represents the greatest threat to the commonwealth’s fiscal stability. Unfortunately, the governor vetoed S.B. 1, a commonsense reform measure that would have addressed the pension crisis by making comprehensive and structural reforms to the pension systems going forward.

So how does the governor’s budget proposal compare to the spending plan passed by the General Assembly, which addressed the state’s structural deficit without raising taxes on Pennsylvania’s job creators and taxpayers?

The Wolf administration’s budget proposal would be among the priciest in the nation (at eighth among the states) and the governor’s tax plan is the largest proposed tax increase in the country when compared to other states, according to a study by the National Association of State Budget Officers.

This isn’t even accounting for the administration’s proposed additional tax on the natural gas industry. Yet, despite the fact that this industry has created more than 200,000 direct and indirect jobs, the administration continues to call for this punitive tax.

At a time when the price of natural gas is at an all-time low, this tax (along with Pennsylvania’s already burdensome corporate tax climate) would drive companies to other states.

Massive tax increases are not in the best interest of Pennsylvania’s residents and will not move the state forward. If the Wolf administration really wants "jobs that pay," as it has often said, then we need to work together to make Pennsylvania’s business climate one in which job creators can afford to do business.

As budget negotiations resume, the Pennsylvania Chamber of Business and Industry will continue to advocate for a fair and responsible budget that improves the state’s economic climate and promotes job growth.

Gene Barr is president and CEO of the Pennsylvania Chamber of Business and Industry.