5 things to watch for in Pennsylvania governor’s budget plan
HARRISBURG — Pennsylvania Gov. Tom Wolf will pitch the first budget proposal of his second term to lawmakers Tuesday, and the Democrat can be expected to seek more money for education in a plan expected to exceed $33 billion.
The details of Wolf’s budget plan for the 2019-20 fiscal year starting July 1 remained under wraps Monday, but he has hinted strongly that his second term will continue the push he made in his first term to improve the state’s public education system.
“I haven’t changed my concern and focus on education,” Wolf said last week, “and I think you’ll see that in the budget on Tuesday.”
Here are five things to watch for when the governor’s plan becomes public Tuesday:
The current year’s budget plan was approved at $32.7 billion for the fiscal year ending June 30, but there’s a big caveat. It moved another $900 million in Medicaid costs off-budget onto other revenue sources, a maneuver that critics said masked the true spending increase and the true cost of state government.
Wolf’s administration may need to find new sources of money to cover part of that, while also finding the cash to cover persistent cost increases for health care, prisons and pensions.
For now, the state has a slight cushion, reporting collections at $290 million, or 1.6 percent, ahead of expectations through January.
Wolf has said that he would not propose a broad-based tax increase to balance the budget. However, Wolf last week said he will ask lawmakers to approve a severance tax on Marcellus Shale natural gas production to finance a multibillion-dollar capital plan for a wide range of projects, from controlling floodwaters to fighting blight.
House Republican leaders have vowed to block such a tax.
Public school advocates are asking Wolf for a $400 million increase on the roughly $6.1 billion the state sends to school districts for general instruction and operations costs. The past two years he’s sought $100 million apiece.
Wolf’s administration has said he plans to build on his efforts to expand subsidized pre-kindergarten classes, expand industrial skills training and strengthen science, math and computer courses in high school.
In 2015, Wolf proposed a multibillion-dollar plan to help close funding disparities between wealthy and poor districts and bring the state’s share of public school costs up to roughly 50 percent. It gained little traction in the Legislature, and it is worth watching to see if he retools that idea.
Meanwhile, Pennsylvania’s 14 state-owned universities are struggling to maintain their fleet, and public schools are seeking more safety dollars following last year’s February’s shooting in Parkland, Florida, that killed 17 people.
Republican majorities in the House and Senate are the smallest Wolf has faced. However, the GOP still maintains strong majorities in both chambers and will have a lot to say about the budget proposal.
House Majority Leader Bryan Cutler, R-Lancaster, said last week it is good that the state is running a surplus, but the focus should be on where money is being spent and where money can be saved. He also said he would like to make extra payments on debt and improve the state’s financial footing.
Pennsylvania is in perhaps the strongest two-year period for tax collections since before the recession a decade ago, but it faces fiscal challenges. That includes rising long-term borrowing costs after issuing bonds for school construction projects and backfilling 2017’s $2.2 billion deficit largely by borrowing.
Meanwhile, Pennsylvania remains a relatively slow-growing economy as its retirement age population is projected to balloon in the coming decade and its working-age population is projected to shrink.
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