There seems to be an overall optimism among state legislators that the Pennsylvania budget will pass on time given the positive revenue numbers in the state, a straight-forward budget proposal by the governor, and no haunting budget deficit to overcome like in years past. That said, the details of what said budget will look like have not been shared.
To help legislators stay focused on what is most important to Pennsylvanians throughout the Commonwealth, we have put together a list of four to-dos:
– Increase state funding for education at all levels.
– Pass a severance tax.
– Increase the minimum wage.
– Stop harmful work requirements attached to SNAP and Medicaid.
1. Increase state funding for education at all levels
Pennsylvania’s poor investment in education at all levels has led to devastating impacts for students across the Commonwealth. Our state ranks 46th in the nation in terms of our state share of investment in K-12 education. We have the most unequally funded schools in the U.S. with the poorest school districts paying 33% less than the state’s most affluent. And Pennsylvania ranks 47th in terms of our per capita investment in higher education.
The legislature should accept Governor Wolf’s proposed increases in education funding for K-12, pre-K, higher education, and workforce development education programs.
Governor Wolf proposed a $100-million increase in K-12 classroom spending through the Basic Education subsidy. If passed, after eight long years this proposal would finally restore the drastic budget cuts Governor Corbett made in 2011-12 (that is, in nominal dollars—not adjusted for inflation). While this funding would not fully address the great inequities between the state’s poorest and richest school districts, this additional funding will go through the fair funding formula which distributes funds more equitably.
Governor Wolf also proposed an increase of 18% to early childhood education programs—$30 million for Pre-K Counts and $10 million for Head Start Supplemental Assistance. As abundant evidence has shown, early childhood education is critical to lifelong success for students. An investment in early childhood education is an investment in our youth and the future of our Commonwealth.
At a minimum this June, the state legislature should increase investment in higher education by providing the State System of Higher Education an additional $15 million and make a strong investment in workforce development programs. The Governor also proposed a $90-million increase for Career and Technical Education and other workforce development efforts to further link state agency efforts and connect such efforts to higher education. Additional money would go towards expanding apprenticeship in Pennsylvania to industries and occupations where this workforce model is scarce but much needed. Apprenticeship is a great education/workforce model where individuals earn while they learn, leading directly to good paying jobs.
2. Pass a severance tax
Our state faces a public investment deficit, as evidenced above by our poor rankings in education funding, quality, and equity. Part of this public investment deficit is due to decreasing state revenues. For example, in 1972 corporate taxes accounted for 30% of our General Fund revenue, whereas today it only accounts for 15%. Declining corporate revenue means there is less money in our state coffers to spend on quality education, much-needed human services, and infrastructure upgrades.
The Pennsylvania state legislature must pass a severance tax to bring additional revenue into the state. Pennsylvania remains the only natural gas-rich state allowing gas companies to drill without paying taxes on the value of gas extracted from within our borders. Governor Wolf’s proposal to impose a severance tax would bring in an additional $200 million this coming year and over $400 million by 2021-22—this would be on top of the already established impact fee. When considering the combination of the impact fee along with the proposed severance tax, the lifetime effective tax rate (ETR) in Pennsylvania would be about 4%—not as strong as West Virginia’s severance tax rate of 5% but much better than the impact fee ETR alone (1.6%).
3. Increase the minimum wage
The legislature needs to pass an increase in the minimum wage to $12 hour, indexed to inflation and with a path to a $15 minimum wage. An initial increase to $12/hour will lift the wages of 1.6 million workers in the state: stunningly, nearly one-third of the Pennsylvania workforce (28.9%). Such an increase would have widespread benefits, including increasing the purchasing power of workers across the Commonwealth which will fuel our economy and decrease reliance on public assistance. A new report from the Keystone Research Center also shows that an increase to $12/hour will decrease child poverty from 19% to 12%. Further increase in the minimum wage to $15/hour would further drop child poverty rates to 8%.
4. Stop harmful work requirements attached to SNAP and Medicaid
Lastly, the Pennsylvania legislature needs to stop all efforts aimed at attaching work requirements to SNAP and Medicaid. HB1659 would impose work requirements on those who rely on SNAP, or food stamps, to stave off hunger and HB2138 would do so for those who rely on Medicaid for their health insurance. These measures just got through the Senate Health and Human Services Committee and will go up for a vote very soon in the full Senate. While touted as getting people to work, the real consequences of these measures will be an increase in hunger and the uninsured throughout the state. These measures must be defeated.