HARRISBURG — Gov. Tom Wolf has set the bar high for his eighth and final budget, a $43.7 billion plan hailed by supporters for historic spending on education and social services but dismissed by critics who dismiss the proposal as a campaign trail that would put Pennsylvania on a path to a major deficit.
The proposed revenue totals $47 billion, according to the budget plan, leaving a projected year-end balance for 2022-23 of $3.3 billion. The budget is based in part on a projected surplus for the current fiscal year, which ends June 30, of over $6.4 billion.
The plan does not include any new tax increases. It allocates all of the remaining $2.2 billion Pennsylvania received from the American Rescue Plan Act. The Commonwealth received a total of $7.3 billion, with the rest either unspent or allocated in the current year.
Wolf unveiled the budget during a joint General Assembly address and championed the Commonwealth’s fiscal situation, citing an estimated surplus of more than $2 billion over a comparable deficit during his speech. first appointment. The rainy day fund eclipsed $2.8 billion and no tax increases are planned for 2022-23.
“We no longer dig a hole. We are ready to build. And this year’s budget does just that, making new investments that will build a better future for Pennsylvania families,” Wolf said in his speech.
Republican lawmakers say Wolf’s latest budget proposal, however, puts the next governor in a position to inherit the same financial ills he faced on his first day in office. Majority leaders have credited Republicans with holding the line on proposed tax hikes during Wolf’s tenure. They say his proposal to deplete the state’s remaining $2.2 billion in federal pandemic relief supports an unanswered plan to maintain funding for years to come.
Citing comparisons with data from the Independent Fiscal Office, the GOP says Wolf’s budget would create a deficit of nearly $800 million in 2023-24 and pave the way for a deficit of nearly $5 billion in 2026-27. The Wolf administration projects surpluses over this period.
“The governor’s revenue and spending projections over the next few years are unrealistic, do not align with traditional growth rates, and will exacerbate our existing structural imbalance,” said Senate Appropriations Committee Chairman Pat Browne. , R-Lehigh, from the Capitol rotunda. Wolf’s address.
Browne noted that spending under the plan is increasing by almost 17%. Another member of the Appropriations Committee saw the surplus as an opportunity to do just that, spend more on state taxpayers.
“We need to use the surplus from this budget to show Pennsylvanians that we see where they are struggling, and we support a budget that gives them support where they need it,” said Vincent Hughes, chairman of Democratic Appropriations at the Senate, D-Montgomery/Philadelphia, mentioned.
Under Wolf’s proposal, education spending would rise to $17.1 billion, a 9% increase, mirroring some of the education spending proposed by the Democratic caucus. Of that amount, $11.9 billion is proposed for K-12 education, up from $10.1 billion in the current fiscal year.
Public schools would see basic education grants increased by $1.55 billion, of which $300 million would go to the poorest schools in the state through the Level Up initiative. The rest would be allocated through the Equitable Funding Formula, which distributes funds based on student demographics.
An additional $200 million is proposed in increased spending for special education, plus $200 million in increased tuition assistance. An additional $60 million would go to Pre-K Counts, enabling 2,308 more children to enroll in the program.
Net corporate income tax would drop from 9.99% to 7.99%, with a trajectory of 4.99% in the coming years. The proposed changes to the tax structure would also “level the playing field” for businesses.
The proposed investments in child care include a combined new spending of $128 million. The funds would increase base payments by $77.7 million to subsidized care providers, as well as an additional $44.3 million in federal dollars to offset family co-payments. An additional $6 million is proposed to encourage operators to extend facility hours.
State employees would benefit from an additional $30 million invested in childcare options.
Nursing facility rate increases total $190 million in the proposal, including $91 million from public funds. An additional $50 million would increase the additional payment for personal care homes. An additional $14 million is planned for hiring additional staff at Pennsylvania’s six veterans care homes.
The state’s minimum wage would increase to $12 an hour on July 1 and rise to $15 in 2028 through annual phased increases of 50 cents. An estimated 1.5 million people would see their salaries increased, according to the Wolf administration.
Pennsylvania State Police spending is rounding out two new classes of cadets — 300 new soldiers — plus $7.7 million for purchases of technology like body cameras. The plan provides $141 million in funds from the general fund, which avoids reliance on transfers from the Automobile Licensing Fund intended to help municipalities maintain roads.
The county’s core mental health funding cuts would be partially restored with $36.6 million. An additional $32.3 million, more than half in state dollars, would help people with developmental disabilities and autism currently on waiting lists. That’s on top of $400 million in rate increases that began Jan. 1. The Wolf administration says these funds are sustainable.