Op-Ed: 2016-17 State Budget Offers Opportunity

 

On Monday, April 25, the 2015-16 state budget was finally, and thankfully, completed.

Last week, Governor Wolf allowed the last component of the current year’s spending plan to become law without his signature, and now Pennsylvania’s state government programs and services are fully funded.

To be sure, the debates over increased taxes and spending in 2015 highlighted some very real differences in how people view the appropriate size, scope and cost of their state government.

Governor Wolf and his supporters argued that additional taxes were necessary to support increased spending.

Others, including the vast majority of my constituents who contacted me, urged reasonable spending increases, coupled with increased accountability, elimination of waste, fraud and abuse, and better management of existing resources as a more appropriate way to meet the state’s needs.

While the debate on the 2015-16 budget is now over, the work on the 2016-17 state spending plan is now underway, and it is likely that many of the same arguments will be made regarding how to best meet the needs of the people of Lancaster County and Pennsylvania.

To me, the annual state budget is a unique opportunity to responsibly advance programs and services that will promote strong families, vibrant communities, high-performing schools and help build a robust economy driven by the free enterprise system.

Those components – families, communities, schools and our economy – are the proven foundation that will foster an opportunity society where everyone, regardless of their station in life, can experience earned success.

Next fiscal year our Commonwealth and its taxpayers will spend over $30 billion.

These monies are intended to demonstrate our priorities.  How much we spend, in addition to what we invest in, reflects policy choices that we are making about how best to meet today’s needs and prepare for tomorrow’s challenges.

I would like to see our state budget prioritize spending and invest in programs and services that will help us build an opportunity society because every person deserves the chance to experience earned success.

To begin the 2016-17 budget conversation, Governor Wolf has again offered his ideas on how to make Pennsylvania great.

This year, he is advocating a $3 billion tax package, including an 11% increase in the personal income tax (from 3.07% to 3.4%), which would be retroactive to January 1, 2016.  He is proposing to expand the sales tax base to tax basic cable TV, movie theater tickets and digital downloads.  He wants to raise the cigarette tax by $1 per pack, as well as add a 40% wholesale tax to other tobacco products and electronic cigarettes.

The Governor also requested that the General Assembly give him a new tax on natural gas production, impose a surcharge of 0.5% on premiums to fire, property and casualty insurance, raise the rate of the shares tax on bank and trust companies, and impose a new 8% tax on promotional plays at casinos.

As a result of these new revenues, the Governor’s budget would increase state spending to nearly $33.3 billion, a two-year increase of $4.3 billion, or roughly 14%.  Unlike last year, there is no property tax reduction component to the Governor’s budget.

To put that in perspective, the three largest cost-drivers in state government are the Departments of Education, Human Services (Welfare), and Corrections.  These executive agencies comprise almost 80% of all state spending.

Under Governor Wolf’s 2016-17 plan, the Department of Education’s budget would grow by 22% over two years, the Department of Human Services’ budget would increase by 12% over two years, and the Department of Corrections would see increases of 22% over a two-year period.

To me, the question is whether these policy choices, as reflected in additional taxes and spending, will promote opportunity?

Will Governor Wolf’s plan strengthen families and encourage vibrant communities?  Will our schools be more successful in their educational mission?  Do these ideas help or hurt our economy?

These are critical questions and the choices we make today will greatly matter.

As the General Assembly begins the difficult work of balancing the many competing interests in the 2016-17 state budget, I am hopeful that by working together, we can enact an affordable, responsible spending plan that reflects the priorities of an opportunity society agenda.

Like last year, I invite your feedback, which has been extremely helpful.  Please take the time to write, email, call or visit me and let me know your thoughts.

In the end, I genuinely believe we all want the same thing – opportunity.

After all, there is nothing more rewarding and dignified than when everyone who seeks it, can experience earned success.