Winners and losers in Gov. Tom Wolf’s 2019-20 budget proposal

He wants every school district teacher to earn at least $45,000 a year.

  • Ed Mahon

Ahead of Tuesday’s budget address, some wondered just how ambitious Gov. Tom Wolf would be since the Democrat from York County no longer has to worry about running for re-election.

On Tuesday, Wolf gave his answer, as he unveiled his state spending plan for 2019-20.

The plan and Wolf’s budget address marks the start of budget negotiations in Harrisburg, where Republicans control both the state Senate and House.

Here’s a look at who the budget plan could help or hurt.

Check back for updates throughout the day.

Winner: Some teachers, especially in rural areas

Under Wolf’s budget proposal, the state would set a base salary of $45,000 a year for teachers. According to his prepared budget address, Wolf describes that increase as “an investment the state — not local school districts — will make.”

There are some school districts in the state where even the average classroom teacher — not just ones on the low end of the payscale — earns less than $45,000 a year, according to Pennsylvania Department of Education data for 2017-18. Those districts are in Somerset and Cambria counties.

“This could be a game-changer for our schools — especially for our communities that are struggling to attract and retain the next generation of educators,” Wolf’s prepared remarks say.

The increase would apply to school districts, not charter schools, according to Wolf’s press secretary, J.J. Abbott.

Loser: Communities that rely on state police

As Wolf did in 2017 and 2018, he is proposing a fee for municipalities that don’t have their own local police force and instead rely on the Pennsylvania State Police.

In this budget, there is a change: The Wolf administration says the fee would use a sliding scale based on a municipality’s size. Across the state, 67 percent of municipalities rely on state police to provide coverage, according to the Wolf administration.

Winner: K-12 schools

The proposal includes $200 million more for basic education funding and $50 million for special education funding, according to the Wolf administration.

The Wolf administration says about $13.8 million of K-12 funding is targeted for the minimum teacher salary increase to $45,000 a year.

Winner: Deja vu

If some of the proposals in Wolf’s budget sound familiar, that’s because they are.

Wolf is again proposing reducing the corporate net income tax rate — this time from 9.99 percent to 5.99 percent by 2024 —  while also eliminating the so-called “Delaware loophole” that his administration has argued lets businesses avoid paying their fair share. Wolf made a similar proposal four years ago, although back then he wanted the corporate net income tax rate to go down to 4.99 percent.

The Wolf administration described corporate net income tax rate changes and “Delaware loophole” changes as part of a revenue neutral measure.

Winner: Cautious optimism

At a news conference, Republican leaders in the House and Senate had mostly kind words for Wolf’s tone and approach. In the video clip below, you can see Senate Majority Leader Jake Corman’s response:

Still, there is likely to be a disagreement on a number of the details.

Winner: State universities

For the Pennsylvania State System of Higher Education, Wolf is proposing a $7 million increase.

Break-even: State-related universities

The Wolf administration says it is proposing flat funding for the four state-related universities: Lincoln, Penn State, Temple and Pittsburgh.

Winner: People who pay income and sales taxes

The budget includes no broad-based tax increases, according to the Wolf administration.

Matt Rourke / AP

Democratic Gov. Tom Wolf delivers his budget address for the 2019-20 fiscal year to a joint session of the Pennsylvania House and Senate in Harrisburg, Pa., Tuesday, Feb. 5, 2019. House Speaker Mike Turzai, R-Allegheny, and Lt. Gov. John Fetterman is at right.

Winner: Many workers who earn less than $15 an hour

As expected, Wolf’s budget proposal included a proposed minimum wage increase.

Pennsylvania’s minimum wage last increased in 2009. Since then, it has been the same as the federal level: $7.25 an hour.

Last week, Wolf proposed raising the minimum wage to $12 an hour this year, and then increasing the wage in 50 cent increments so it reaches $15 an hour in 2025. The move would include tipped workers.

In the budget, the Wolf administration says that a $12-per-hour minimum wage would save the state $36 million in general fund money in 2019-20, because fewer people would rely on government services. The savings would increase to nearly $120 million in the 2020-21 fiscal year, according to his administration.

Loser: (Probably) some workers and business owners

Despite the benefit a minimum wage increase would have for many workers, there are likely trade-offs. In April 2018, the state’s Independent Fiscal Office estimated that gradually increasing the state’s minimum wage to $12 per hour would raise wages for more than 1 million workers, but would also result in about 33,000 fewer job opportunities.

As the Independent Fiscal Office notes, there is a lot of debate about the impact of minimum wage increases, and conclusions can vary.

Loser: Teenagers who want to spend less time in school

In 2016-17, there were more than 4,000 students who left school at the age of 17 before graduating. Wolf is proposing raising the compulsory school attendance requirement from 17 to 18, and his administration argues that dropping out sets people on a path that typically leads to lower annual incomes.

Loser: Parents who want their young kids to spend less time in school

Wolf’s proposal also would lower the age for compulsory school attendance from 8 to 6. The Wolf administration estimates the change will increase enrollment by more than 3,300 children.

Separately, the Wolf administration is proposing a study on the effectiveness and impact of lowering Pennsylvania’s compulsory age of school attendance further to the age 5. The goal is to move toward universal access to free, full-day kindergarten.

Statewide, it is estimated that 49,000 5-year-olds are not enrolled in school.

Winner: Community college students and graduates who work in Pennsylvania

As part of the program, there will be one-time grants of $2,500 to people who are students or have graduated from a Pennsylvania community college and are currently working in the state.

Loser: Opponents of new spending

Wolf’s budget increases the general fund to about $34.15 billion.

That equals an about $927 million or 2.79 percent increase compared to what his office says is available for 2018-19. (In June, lawmakers approved a $32.7 billion general fund budget for the current year, but costs have been higher than initially estimated.)

Senate President Pro Tempore Joe Scarnati, a Republican, raised concerns about spending.

“We have a problem in Pennsylvania, and the problem isn’t with the revenues. It’s from the expenditures,” Scarnati said at a news conference. “And we have to balance this out. And it will require a lot of work. This budget’s not just going to be a slam dunk.”

What about  a severance tax?

Wolf has tried to pass a severance tax every year since taking office. And this year is no different.

But this year, that severance tax is being introduced as legislation separate from the budget process. Last week, Wolf proposed a $4.5 billion spending plan for infrastructure improvements that would rely on a severance tax and borrowing money.

While that proposal is set apart from the budget presentation and address, it remains to be seen whether it truly stays separate from negotiations this spring. In budget documents, the Wolf administration describes the natural gas industry as a long-term asset for the state and region, but it says drilling activity has slowed due to low prices.

Ed Mahon can be reached at 717-421-2518 and at emahon@papost.org.

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