WATCH PBPC’S FIRST TAKE ON THE 2021-2022 BUDGET by our director, Marc Stier, SEIU State Council executive director Reesa Kossoff, Education Voters executive director Susan Spicka, and long-time progressive lobbyist Morgan Plant. Below is PBPC’s statement on the governor’s proposed budget with some data charts to provide context.
PBPC statement on Governor Wolf’s proposed Fiscal Year 2021-22 budget:
Governor Wolf’s proposed budget for the year that begins in July 2021 is a bold plan to address not only the problems facing Pennsylvania’s students, workers, and businesses as a result of the pandemic, but also the economic and racial inequities that have plagued our state for decades.
The centerpiece of the proposal is a plan to increase funding for K-12 education. It provides more money for Pennsylvania’s school children in a way that reduces historical inequities in state funding of our schools. Currently, school districts in wealthier communities have the local resources to spend 33% more per student than school districts in poor communities. And state funding for schools with a high percentage of white students is 33% more per student than in schools with a high percentage of Black students. Governor Wolf proposes to use the fair funding formula to distribute most of the state’s Basic Education funds to school districts, which would make reduce these inequities. But his plan ensures that not only would no school district lose funding, but that they would all see some increase for next year.
This education funding proposal is paid for by a plan to reduce the unfairness of our tax system. Now, low- and moderate-income families pay state and local taxes at about twice the amount of the top 1%. By increasing the personal tax rate, while also expanding tax forgiveness for Pennsylvanians with low and moderate incomes, the state could raise more than $1 billion in new revenues, while cutting taxes for many Pennsylvanians. More than 40% of Pennsylvania families will see their taxes go down and the taxes for another 27% will stay the same. Only the most well-off third of Pennsylvanians would pay more. After decades of increasing inequality, that has been exacerbated by the pandemic, a tax proposal along these lines is overdue and should be welcomed by all of us.
The governor again proposes to create the Nelly Bly scholarship program to help high school graduates afford college. Given that our state ranks close to the bottom in support for higher education and close to the top in tuition costs, this is big step forward. The program will be paid for by transferring money from the Race Horse Development Fund, which mostly supports rich racehorse owners, most of whom live outside of Pennsylvania.
Another important proposal by the governor is to increase the minimum wage in steps to $15 per hour by 2027. This proposal would not only help Pennsylvania workers on the front lines who have been struggling during the pandemic, but many workers who currently make more than $15 per hour now, as their wages will go up as well. By 2027, more than 1.6 million Pennsylvanians, or 27.5% of our workforce, will receive a raise. The additional $6.2 billion in wages they receive would boost local businesses and help the Pennsylvania economy recover from the pandemic.
The governor also proposes another initiative to help rebuild the Pennsylvania economy at a time when the pandemic has accelerated economic changes that has eliminated many jobs. Refocusing the Restore PA plan on workforce development programs that will smooth the path of young, middle-aged, and older Pennsylvania workers into the jobs of the future, while providing critical support for new business growth, particularly in manufacturing. The Restore PA plan will be funded with bonds paid by a severance tax on shale gas, which the state should have instituted a decade ago. The governor has also renewed his call for $145 million in state aid for small businesses that are struggling due to COVID-19. This plan is much needed to ensure that small businesses, and the jobs they create, are around recover when the pandemic ends.
Other notable and positive elements of the budget proposal include:
There are many other thoughtful and helpful proposals in the governor’s budget that we will describe in detail when our full analysis is complete.
Some context for the #PABudget: Low- (below $20k) and middle-income (ave. income of $60k) Pennsylvanians pay a far higher share of their income in state and local taxes than the 1% (ave. income $1.5 million) do.
It’s not only rich people that don’t pay their fair share in taxes—neither do corporations. Corporate tax cuts cost the state $4 billion per year. The share of General Fund revenues that comes from corporate taxes is half of what it was in 1972.
Some context for #PABudget: State revenues and expenditures have been shrinking as a share of the PA economy, creating a #PublicInvestmentDeficit.
As a share of the state’s economy, #PABudget spending on higher education is only 38% of what it was in 1983-84. PA economic statistics put us at the top in only one thing: student debt!
As #PABudget spending on higher education has fallen, tuitions and fees have gone up and Pennsylvania’s are now the third highest in the nation! PA economic statistics put us at the top in only one thing: student debt!
What does the #PABudget spend your money on? Subsidizing horse racing and the millionaires (including foreign princes) who own them! Let’s put this money into Nelly Bly scholarships for higher education.
As spending on higher education has gone down, spending on prisons has gone up. That’s not an accident. Giving everyone an opportunity for a good education would reduce crime.
The #PABudget also spends too little on K-12 education. We rank 44th in state funding, and we rely too much on local funding. We have the most unequally funded schools in the country—rich school districts spend 33% more per student than poor school districts.
Most state funding does not go through the fair funding formula. As a result, schools w/ a high share of students of color still receive far less funding per student than primarily white schools. And students in wealthier school districts received 33% more funding per student than students in poorer districts. The #PABudget should increase funding for our schools and run far more of it through the fair funding formula (while protecting school districts from losses) to ensure that every student gets the education they need, no matter their zip code.
Small businesses are still suffering from the pandemic. The #PABudget should be keeping them alive so they can reopen when COVID-19 is under control.
Small businesses need help now. It’s time for the #PABudget to give them the support they need to get through this difficult time while keeping customers, employees, and communities safe.
As the minimum wage increased the economy grew faster. Since the minimum wage has declined after inflation, the economy has been growing more slowly. A higher wage would enable people to buy more from local businesses. #PABudget
The #PABudget needs to finally #RaiseTheWagePA! When the minimum wage reaches $15 an hour, workers making less than $15 as well as those making above will benefit. Over a quarter of PA workers—more than 6 million people—will get a pay raise!
The #PABudget also spends too little on infrastructure. We don’t have a graphic, but how long will it take you to find a pothole and post it with the hashtag #potholetax?
As the minimum wage has fallen (and labor unions have been undermined) the rich have gotten far richer while incomes for the rest of us have stagnated. It’s time for the #PABudget to reverse this.
Income and wealth inequality have gotten worse during the pandemic. Working people are unemployed or working short hours. Upper middle-class professionals are holding their own, But the very rich who own corporations are getting richer. It’s time for them to pay their fair share #PABudget.
Harrisburg, PA — Statement on the governor’s newly released agenda by Marc Stier, Director, PA Budget and Policy Center...
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