Gov. Tom Wolf Tuesday unveiled a $29.9 billion 2015-2016 General Fund budget proposal, which is an increase of about $900 million from the current year, that makes investments in education, while, he said, takes concrete steps toward rebuilding the middle class.
Gov. Wolf’s budget restores cuts to basic education with a four-year commitment to increase funding by $2 billion while cutting property taxes paid by the average homeowner by 50 percent and reducing the total tax burden on average, middle-class families.
He achieves these goals by proposing a Personal Income Tax Increase from 3 percent to 3.7 percent and a Sales Tax increase from 6 percent to 6.6 percent, plus eliminating 45 current exemptions from the tax.
Also increased are the Cigarette Tax by $1 per pack and proposed a new 40 percent tax on the wholesale price of smokeless tobacco, large cigars, loose tobacco and e-cigarettes.
The Governor also proposed a new natural gas severance tax of 5 percent and 4.7 percent per volume which is expected to yield $165.7 million in the first year.
Gov. Wolf’s budget also helps grow jobs in Pennsylvania by cutting the corporate net income tax by 50 percent and making strategic investments in job creation through programs like the Made in Pennsylvania manufacturing tax credit.
“My budget rebuilds the middle class in Pennsylvania starting with three priorities: jobs that pay, schools that teach, and government that works,” said Gov. Wolf. “Pennsylvania can have a bright future, but we cannot simply do the same things over and over and hope for different results. My plan balances the state budget, cuts taxes to create jobs with good middle-class wages, makes historic investments in education to prepare our kids for the jobs of tomorrow, and reduces the total tax burden on the average middle-class homeowner. We need to think differently and do things differently. It’s time for bold change.”
“We all know the challenges Pennsylvania faces. We are staring at a $2.3 billion budget deficit, we are near the bottom of the country in job growth, our state’s credit ratings have been in decline, and our schools are struggling. These are bipartisan challenges and they require bipartisan solutions. My budget incorporates many Republican and Democratic ideas to move Pennsylvania forward.”
Jobs That Pay
Gov. Wolf is a businessperson. He has a plan to create jobs and get the economy back on track.
-- This budget makes our corporate tax climate competitive by immediately lowering our corporate tax rate by 40% to 5.99 and cutting it by 50% by 2018, finally zeroing out the capital stock and franchise tax, and closing corporate tax loopholes.
-- Gov. Wolf’s budget will help revive Pennsylvania’s manufacturing economy by providing tax credits and targeted assistance to companies that create high paying jobs.
Pennsylvania As An Energy Leader
-- We need to partner with the industry and make Pennsylvania a leader in energy manufacturing and development. We need to build new businesses by using our natural gas as a feedstock as well as an energy resource. Pennsylvania can be a leader in industries like biotech, materials, chemicals and life sciences.
-- Gov. Wolf’s budget will make Pennsylvania a national leader in clean energy like solar and wind and Gov. Wolf will work to protect coal and continue Pennsylvania’s traditions of harvesting timber and hardwood.
Developing the Workforce
-- Pennsylvania is a national leader in higher education, and we must partner businesses with our colleges and universities. Gov. Wolf’s budget will encourage community colleges to improve education and training in high-growth sectors.
Schools That Teach
Gov. Wolf’s budget makes historic investments in education while eliminating the deficit and ending our commonwealth’s endless year after year fiscal crises. Gov. Wolf’s budget restores cuts to basic education with a 4-year commitment to increase funding by $2 billion.
-- Gov. Wolf has proposed a plan to restore funding for schools and make natural gas companies pay their fair share.
-- Gov. Wolf’s budget will increase the state’s share of funding for public education to 50% for the first time since the 1970s and cut school district property taxes by more than 50 percent for the average homeowner.
-- This will reduce the burden on the middle class and senior citizens who are already overburdened.
-- This budget pursues a goal of universal pre-kindergarten instruction for all children.
-- In two years, Gov. Wolf’s budget restores cuts made to our institutions of higher learning.
Reforming Charter Schools
-- Gov. Wolf’s budget reforms cyber charter school funding by installing payment limits. These cuts will save school districts more than $160 million.
-- Gov. Wolf’s budget also makes the pension “double dip” prohibition permanent stopping charter and cyber charter schools from being paid twice for the same employee pension costs.
Tax relief for the middle class
-- Gov. Wolf’s budget delivers historic property tax relief of $3.8 billion.
-- It includes an average of more than $1,000 of tax relief to homeowners reducing school district property taxes by more than 50%.
-- The average Pennsylvania family will receive a tax cut of about 13 percent.
-- These are reforms championed by Republicans.
Government That Works
Gov. Wolf’s budget cuts costs and makes government more efficient
-- Gov. Wolf’s initiative, GO TIME, will save taxpayers more than $150 million in the next year.
-- By consolidating some of the programs launched by the last Administration, our Medicaid changes make the program better and save more.
Pension Reform That Works
-- This budget prioritizes returns and cost savings instead of paying extravagant Wall Street fees, saving hundreds of millions each year. Every year Pennsylvania spends nearly $700 million on fees to hedge funds and other Wall Street firms to manage our pension funds, more than most other states. These changes will save hundreds of millions per year.
-- By stepping up and paying our bills now, like families must do each month, we can reduce our obligations and get our pension system back on track.
-- Gov. Wolf will do that by creating a dedicated revenue stream and depositing it in a restricted account so politicians can no longer spend employees’ pension savings at their whim.
-- Gov. Wolf’s plan will produce savings to reduce our total long term liability by more than $10 billion.
Doing Right By Our Seniors
-- By lowering property taxes, we will make it easier for seniors to stay in their homes and Gov. Wolf’s budget will provide more home health care options for seniors so they can live at home for as long as they want to remain there.
Click Here to read the full budget address. Click Here for FY 2015-16 Budget documents. Please visit the PA Capitol Digest Blog for ongoing updates ahead of our weekly Digest.
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