Highlights of Pennsylvania governor’s state budget proposal

By The Associated Press undefined

HARRISBURG, Pa. (AP) — Highlights of Pennsylvania Gov. Tom Wolf’s spending plan for the 2020-21 budget year that starts July 1:

THE BIG PICTURE

— Increases spending through the state’s main bank account to $36.1 billion. Including nearly $600 million for the current fiscal year, Wolf is seeking authorization for another $2.6 billion in new spending, or 7.6% of this year’s enacted budget of $34 billion.

— Projects a 4.5% increase in tax collections to $37.3 billion, before refunds. Does not increase tax rates on sales or income, the state’s two biggest sources of revenue.

— Asks lawmakers to expand a bond-funded redevelopment grant program by $1 billion and make the money available for the cleanup of lead, asbestos and other environmental health hazards in school buildings.

— Calls for lawmakers to raise the state minimum wage to $12 an hour on July 1, up from the federal minimum of $7.25 an hour.

TAXES AND FEES

— CORPORATE INCOME TAXES: Restructures how the state would calculate corporate profits to adopt “combined reporting” and reduces the current 9.99% tax rate by annual steps to 5.99% in 2025. The change is estimated to produce an additional $240 million in revenue in 2020-21.

— STATE POLICE FEE: To help fund the state police budget, imposes a fee on each municipality that would be driven by incidents and coverage area, and weighted by population, income and whether a municipality has its own full-time or part-time police force. The administration estimates the fee would produce $136 million.

— MUNICIPAL WASTE: Imposes an increase of $1 per ton on municipal waste hauling to generate $22.6 million for the Hazardous Sites Cleanup Fund, which is projected to be out of money at the end of 2020.

— GAS DRILLING: Seeks approval of a tax on Marcellus Shale natural gas production to underwrite a $4.5 billion “Restore Pennsylvania” infrastructure program. Using estimates of 2019 production and a price of below $3, the tax would yield more than $600 million in a year.

SAVINGS MEASURES

— Delays a $377 million payment to providers for long-term programs for the elderly.

— Taps $275 million in surplus cash already appropriated, but left unspent in state accounts.

SPENDING BY CATEGORY

— HUMAN SERVICES: Grows $1.2 billion, or 9%, to $14.4 billion.

— PRE-K and K-12 EDUCATION: Grows $170 million, or 2%, to $9.2 billion.

— HIGHER EDUCATION: Grows $58 million, or 3%, to $1.8 billion.

— CORRECTIONS AND PAROLE: Shrinks $73 million, or 3%, to $2.6 billion.

— PENSIONS: Grows about $150 million, or 4%, to $3.7 billion.

— STATE POLICE: Grows $45 million, or 4%, to $1.4 billion.

— DEBT: Grows $6 million, or 0.5%, to $1.15 billion.

EDUCATION

— Increases aid for general public school operations and instruction by $100 million for basic instruction and operations, an increase of 1.5%, to $6.9 billion.

— Calls for every school district to provide free, full-day kindergarten. The administration did not estimate how much such a move would cost.

— Diverts more than $200 million in revenues from a tax on slot-machine gambling that subsidizes the state’s horse racing industry to fund scholarships for students at a State System of Higher Education university if they remain in Pennsylvania for as long as they receive the benefit.

— Establishes a statewide cyber-charter school tuition rate that would save $133 million a year for school districts.

— Changes special education reimbursements for charter schools to save $147 million a year for school districts.