On February 5, Gov. Tom Wolf outlined his 2019-20 budget proposal that included major workforce development and education initiatives he said would build the strongest workforce in the nation.
He proposed no increase in general taxes, a restructuring of how the state would calculate corporate profits to adopt “combined reporting” and would reduce the current 9.99 percent tax rate by annual steps to 5.99 percent in 2024. The move is revenue neutral initially.
He did include a new natural gas severance tax to support his separate $4.5 billion Restore Pennsylvania proposal.
He said the package of programs would overhaul of policies, create a Statewide Workforce, Education, and Accountability Program to provide opportunities for Pennsylvanians from birth to retirement.
He did include a new natural gas severance tax to support his separate $4.5 billion Restore Pennsylvania proposal.
He said the package of programs would overhaul of policies, create a Statewide Workforce, Education, and Accountability Program to provide opportunities for Pennsylvanians from birth to retirement.
“Today, I present a comprehensive plan to help grow our economy by continuing to invest in our workforce,” said Gov. Wolf. “This plan calls on contributions from the business community, labor unions, educators, research institutions, students, parents, and adult workers. And it increases opportunity for every Pennsylvanian at every stage of life – from birth to retirement.”
“The people of our Commonwealth have proven that, despite the challenges we face, Pennsylvania remains a place worthy of its history – a place where people can find good work, strong communities, and opportunity for their kids. And, here in Harrisburg, we’ve proven that despite our differences, we remain capable of doing what Washington just cannot seem able to do: tackle big challenges, put aside petty partisanship, and serve the public interest.”
A core component of the governor’s plan is the Keystone Economic Development and Workforce Command Center, which brings together agency heads and public and private sector experts in a unique approach to finding solutions that connect skilled workers with good jobs that employers need today and in the future.
The governor’s budget expands access to early childhood education, increases investments in schools, and partners with the private sector to build on the PAsmart initiative, launched last year as a groundbreaking approach to workforce development.
Workforce Command Center
Tackling the skills gap and creating a well-trained workforce requires government, schools and industry to work together. PAsmart was the first step, but Governor Wolf wants bolder action.
Soon the governor will sign an executive order creating the Keystone Economic Development and Workforce Command Center. The departments of Community and Economic Development, Labor & Industry, State and others will partner with external leaders to find solutions that will strengthen our workforce.
“Across the Commonwealth, we have workers aging out of our workforce, and too often the next generation of worker is not there or doesn’t have the skills to replace them,” said Gov. Wolf. “If we can’t strengthen our workforce, we will fall behind. And we cannot let our government’s response to this problem be handcuffed by stale habit. The time is now for this comprehensive plan for preparing Pennsylvanians to compete and win in our rapidly changing economy.”
Early Childhood and Parent Support
Parents cannot work if they lack food, housing or childcare. To break the cycle of poverty, the governor’s budget invests in early childhood education and removes barriers for low-income parents.
The proposal provides $5 million to expand home-visiting programs for pregnant women and at-risk infants and toddlers, $15 million in federal funds to reduce waiting lists for high-quality childcare, and $5 million for wrap-around services so parents can attend college or other training to get skills for family-sustaining jobs.
Career Training
The governor’s budget ensures that every student is ready for a career by continuing investments to improve public schools along with more funding for early childhood programs, k-through-12, and higher education.
The budget provides increases of $200 million for basic education, $50 million for pre-k and Head Start, $50 million for special education, $7 million for the Pennsylvania State System of Higher Education, and $8 million in one-time grants for community college students or graduates who are working in Pennsylvania.
Other community college support includes--
-- $8 million tuition assistance for Community College students (new)
-- $239 million for Community Colleges (no change)
-- $48.8 million transfer to Community College Capital Fund (no change)
-- $7 million Regional Community Colleges Services (no change)
PAsmart is an innovative and pioneering approach to connecting Pennsylvanians with education and training opportunities, apprenticeships, and STEM careers and the governor’s budget expands this initiative with an additional $4 million to help Pennsylvania manufacturers train workers and $6 million to expand career and technical education for adults.
Gov. Wolf is also proposing to save nearly $120 million over the next two years by raising Pennsylvania’s minimum wage to $12 an hour on July 1, 2019. The boost in pay for one million workers would enable tens of thousands of people to work their way off of public assistance, reducing the burden on taxpayers who are subsidizing low wages.
To prevent students from falling behind, the governor’s plan lowers the age when students must start attending school from 8 to 6 and increases the dropout age from 17 to 18. The administration will also study the benefits of providing free full day kindergarten to all children starting at age 5.
Minimum Wage Increase
Gov. Wolf also proposed raising the state’s minimum wage this week to $12 an hour by the summer of 2019, and then by 50 cents an hour each year until it reaches $15 an hour by 2025. Read more here.
Severance Tax On Natural Gas
Gov. Wolf renewed his effort to impose a severance tax on natural gas extracted through Marcellus Shale drilling. While this issue is technically separate from the main budget, and run through a different fund, expect the issue to affect negotiations.
The governor proposed borrowing $4.5 billion over four years and dedicating the money to help fund disaster recovery and infrastructure improvement. The loan, the governor said, would be paid off using the money from a severance tax.
Republican leaders have historically resisted efforts to impose a severance tax, saying they fear it could harm the industry. The Wolf administration has said the governor will only take out the loan if legislators approve the levy.
Links To More Details
Links To More Details
Click Here for the 2019-20 budget in brief.
Click Here for the transcript of Governor Wolf’s budget address.
Click Here for the budget spreadsheet.
Click Here for the Big Budget Book.
Click Here for the Budget Slide Presentation.
Click Here for proposed Budget Legislation.
Reaction
Senate Republican leaders said they will continue their push for a fiscally responsible budget that controls spending, holds the line on new taxes and continues to invest in education and job-creation. Senate leaders said they believe that commitment in years past has contributed to job growth and a healthier economy.
Senate President Pro Tempore Joe Scarnati (R-Jefferson): “Given that the economy in Pennsylvania has never been stronger, the reality of our fiscal situation is that we must reduce the proposed spending for 2019-2020. Senate Republicans remain committed to a budget that respects taxpayers while helping continue to foster job growth and economic development across our Commonwealth. It is imperative that we continue to look for reforms and ways to make government more efficient, instead of looking for ways to spend more tax dollars.”
Senate Majority Leader Jake Corman (R-Centre): “Senate Republicans and the General Assembly have a clear legacy of fiscal responsibility. As we begin to work through the 2019-20 budget with the Governor, we see no need to stray from these core values that have led to historic levels of education funding, a strong environment for job creation and a path of economic growth for our Commonwealth. We look forward to working with the Administration to chart a continued path of fiscal restraint that ensures a more firm financial footing for our future.”
Senate Appropriations Chair Pat Browne (R-Lehigh): “Thanks in part to strong fiscal discipline by the General Assembly during tough financial years which has contributed to improvements in the state’s economy, revenue projections show the Commonwealth finishing the current fiscal year ahead of projected estimates for the first time in a decade. While this is certainly good news, with mandated costs continuing to rise year-over-year, it is important that we remain cautious when setting spending levels for this year’s budget and continue to prioritize our limited discretionary revenue on programs and services which are vital to the people of the Commonwealth and have shown proven results. We look forward to delving further into the Governor’s budget proposal as we look for a budget solution that works for all Pennsylvanians.”
Senate Democratic Caucus made themselves available to members of the media to give their reaction--
Sen. Jay Costa (D-Allegheny): “I’m pleased with the governor’s budget address. I think [there are] a number of good initiatives we need to pursue. Certainly the fact that there won’t be any tax increases, that at least he’s recommending, bodes well. I think our economy is moving in the right direction and I think he’ll be able to close whatever revenue he might need by being more efficient and more thoughtful…The continued [investment] in workforce training and workforce development is extremely important. Our continuation of making [investments] in early learning is important to establish that foundation going forward. The big takeaways for me are the continued investment in education and the significant enhancement in workforce training and workforce development, apprenticeship programs and alike to position Pennsylvania for the future.”
Sen. Vincent Hughes (D-Philadelphia): “I think it’s a good start. It’s consistent with the previous budgets from the governor, which are steady and ensure progress forward in a number of areas. I think there are a number of us who would have liked to have seen a more robust investment in education and other spending priorities. I think there are a number of us that would have liked to have seen a more robust presentation around the natural gas severance tax. We’re subsidizing every other state in the country by not having a severance tax. I think a number of us are very pleased with the governor’s proposal for a minimum wage increase; it’s been since 2009 that workers have not gotten a wage increase and if you’re wait staff, it’s been since 1996. The budget also reflects the political reality that exists here with a Democratic governor and Republican control of the House and Senate. We’ll work through it and try to augment certain areas and try to minimize damage in any other areas.”
Sen. Anthony Williams (D-Philadelphia): “It was thoughtful, balanced, and helpful, but we could do more. We need more revenue and I think we have some opportunities around recreational marijuana that are not just conversation pieces, but should be a part of the negotiations as we proceed with the budget.”
Sen. John Yudichak (D-Luzerne): “I think it was a celebration of Pennsylvania’s economy which continues to grow. Over 200,000 jobs created in the last two years, which has led to fiscal health. Revenues are up, corporate taxes and sales taxes are up, that means no new taxes. The governor announced very clearly [there are] no new taxes in this budget, but there are still critical investments in what is growing Pennsylvania’s economy, and that is the Pennsylvania worker. It’s investing in workforce skills, workforce development, investing in schools, investing in our colleges. I think it’s a good start to the budget season.”
House Republican leaders issued this statement:
“The budget proposal that we have been presented with is simply the starting point for our budget negotiations. During the next three weeks, the House Appropriations Committee will hold hearings to thoroughly examine the governor’s budget proposal. Our focus will be on creating a budget that keeps spending growth low, fosters an environment for job creation, and creates value for our hard-working taxpayers throughout Pennsylvania.
“We welcome the governor’s support for improving Pennsylvania’s workforce development platform and share in the desire to attract and grow businesses that provide high-paying, family-sustaining jobs. However, we also remain committed to regulatory and tax reforms that will allow our economy to grow and provide better opportunities for all Pennsylvanians.
“Over the last decade, our Republican majority has consistently showed support for increases to basic education funding. However, it is imperative that the increased funding reaches the classroom and directly relates to student success, and not just paying for ballooning costs at the institutional level.
“We applaud the governor for abandoning the idea of any broad-based tax increases, but his administration showed just in the past few days plans to borrow billions of dollars from our taxpayers. We will oppose this and any measure that attempts to grow our state through borrowing, taxing and uncontrolled spending.”
House Democratic leaders issued this statement on the budget proposal--
“We support the governor’s plan to make Pennsylvania a national leader in education and workforce development without raising taxes on working people. He is beginning this year’s budget talks with a responsible framework for the budget hearings and bipartisan discussions yet to come.
“House Democrats have a Plan For Pennsylvania that closely tracks many of Governor Wolf’s priorities. It’s about having quality schools, good jobs for workers, affordable health care and fairer treatment of all Pennsylvanians in their daily lives. We are fighting for families all across the state.
“We are especially pleased that the governor continues to address the need to fix our criminal justice system. His vocal support for fairer justice means a lot.
“House Democrats share many of the governor’s ideas and look forward to working with him and with our Republican colleagues to deliver a balanced budget that will continue the substantial progress Pennsylvania has made in recent years.”
NewsClips:
Op-Ed: Wolf’s Budget Rhetoric Meets Reality - Commonwealth Foundation
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