Republican lawmakers call Wolf's draft budget 'tone deaf'

Erin Bamer
York Dispatch
Gov. Tom Wolf delivers his 2021 Budget Address

State Republican lawmakers widely panned Gov. Tom Wolf's draft budget Wednesday, calling the tax hikes sought by Pennsylvania's Democratic governor "tone deaf."

On Wednesday, Wolf rolled out his 2021-22 budget proposal, which would hike the state's income tax rate in order to increase funding for public education by about $2 billion. 

"Universal high quality education leads to healthier people and healthier communities," he said in his address. 

Wolf has for years battled with GOP lawmakers who run both chambers of the General Assembly. He's repeatedly sought a new fee on oil and gas producers in order to bolster state revenue, only to see them die in the Legislature.

But the $40 billion draft budget unveiled Wednesday may be among Wolf's most progressive. It includes raising personal income tax rates for the wealthy, a 25% tax cut for businesses and a plan to raise minimum wage. 

Most of Wolf's address Wednesday focused on increasing funding for public education. Under Wolf's proposal, he said the state would double its investment in education, including increased funding in early and special education and a tuition program to improve access to higher education. 

Republicans pushed back almost immediately on Wolf's proposals, particularly his suggestion to hike income taxes. The near universal response from Republicans indicated Wolf's proposals would struggle to become reality.

The increase, several Republicans said at a news conference Wednesday, would be detrimental to small businesses and working families, who are already struggling through the COVID-19 pandemic. 

“Taking the increased revenue from the income tax to grow state spending rather than provide meaningful school property tax relief is a deal-breaker for many Pennsylvanians who have seen their school property taxes remain the same if not increase while they have been laid off from their job through no fault of their own,” said state Sen. Kristin Phillips-Hill, R-York Township, in a statement. 

Wolf is proposing an increase to Pennsylvania's personal income tax rate from a flat rate of 3.07% to 4.49%. The increases would be offset for many taxpayers by a boost in tax forgiveness allowances of up to $30,000 for a married couple, and $10,000 for each dependent, under Wolf's plan.

About two-thirds of the state's lower-income and middle class families would see no tax increases, and some might actually receive a tax cut under the plan, according to Wolf.

"This isn't about putting the rich against the poor," he said in his address. 

More:Watch live: Gov. Tom Wolf pitches tax hike, school funding increase

But Republican lawmakers claimed the tax proposal would lead to a 46% increase in personal income tax rates. The Pennsylvania House Republicans said on Twitter that more than 80% of the state's small businesses pay personal income taxes and would be subject to the tax increase. 

Sen. Pat Browne, R-Allentown, claimed the tax proposal was unconstitutional during a GOP news conference shortly after Wolf's budget address. He said under Pennsylvania's constitution, tax rates must be uniform. He also claimed that for families to receive a tax cut, they must be classified as below the poverty line.

In his address, Wolf said his budget proposal includes a 25% tax cut for businesses and would allocated $145 million to businesses harmed by the pandemic. 

Wolf's proposal called for an additional $1.3 billion to cover teacher salaries and other operational resources. This would add to the $6.8 billion already allocated to schools. Wolf said he wants to increase the minimum teacher salary to $45,000 a year. 

In addition to increasing teacher salaries, Wolf said he wants to increase Pennsylvania's minimum wage from $7.25 to $12 an hour, with the goal to eventually increase it to $15 an hour.

Wolf said the added investment would provide school districts in need of resources the funding they need and wouldn't take away from districts that are already able to provide those resources. Rep. Joanna McClinton, D-Philadelphia, said Pennsylvania ranks near the bottom among U.S. states for fair funding for education and supported Wolf's proposal to provide equitable funding among districts. 

"Let's lift those barriers and stop making excuses for why we can't," Wolf said in his address.

Brian Geller, director of operations for the Northeastern School District in York County, said Wolf's proposal would give an extra $2.6 million to his district. He said he appreciated a portion of the proposal that would "level the playing field" between school districts and charter schools. 

Wolf's proposal includes charter school law reform that he estimated would save public school districts $229 million. Wolf said the reform would "hold charter schools accountable." Many school districts, since the start of the pandemic, have lost students to cyber charter schools, which the districts have to help fund. 

Geller said the Northeastern School District pays cyber charter schools $11,000 for every student it enrolls from its district, and $26,000 for every special education student. Under Wolf's proposal, Geller estimated his district would pay about $9,500 per student. 

More:Charter enrollment in Pa. has spiked since COVID-19 outbreak

Lenny McAllister, CEO of the Pennsylvania Coalition of Public Charter Schools, said in a Wednesday statement that the proposal would cut funding to charter schools, which he called "callously wrong."

"(The proposal) misleads Pennsylvanians by classifying these cuts to charter students as savings for school districts," McAllister said in the statement. "It takes from some public school students unfairly – ones disproportionately among the most disadvantaged in our state – to give to the system."

McAllister said Wolf's proposal singles out "winners and losers" in Pennsylvania's education system by cutting special education funding for charters, cutting tuition costs and implementing a flat fee for regular charter and cyber charter payments. 

The Senate's top Republican, Jake Corman, R-Centre, backed up McAllister's claim during the Wednesday news conference. Corman said Wolf's proposal would limit ways for families to access charter schools, which McAllister also claimed. 

Wolf's education plan received support from several state education organizations, including the Pennsylvania School Boards Association and Pennsylvania State Education Association. PSEA spokeswoman Lauri Lebo pointed out the additional funding for special education and increasing teacher salaries as specific features she supports. 

"It's a good start," Lebo said.

Sen. Jay Costa, D-Pittsburgh, said he isn't surprised Republicans were quick to criticize Wolf's budget address. He said it was "an annual ritual," but said Republicans were criticizing the proposal for its positive aspects, including fair funding and providing communities with necessary resources. 

Costa said he appreciated Wolf's focus on education in the proposal and said the strategy on tax reform made sense. 

"It's a conversation worthy of discussion," Costa said.