After two years of budget head-butting leading to late agreements and quite a few hardships for recipients of state money including, schools, community services and others, the 2017 process has a shot at being completed on time.
For the most part, area legislators are leaning towards the positive after hearing Gov. Tom Wolf deliver his plans for the Commonwealth's $32.5 billion spending plan for the next year. There will still be discussion, debate and arguments, but there's a good chance the budget will be passed on time this year.
Wolf feels that it's a plan that would close Pennsylvania's budget deficit, through cuts, consolidating government agencies, eliminating corporate tax loopholes and, yes, some changes in a few revenue sources.
In brief, some of the items in the budget include: after unsuccessfully trying to increase the minimum wage in the past from $7.25 to $10.15, this year Wolf is hoping to see it raised to $12;
While not looking for broad-based tax hikes in sales or personal income taxes, the budget calls for new fees and tax expansions, like making municipalities without police departments pay $25 per capita towards State Police services and future recruitment. That is expected to bring in $63 million. Also, the current 6 percent sales tax will be expanded to include corporate sales tax uses, like computer-based services, commercial storage, airline meals and others. That is expected to bring in another $485 million;
A 6 percent severance tax on shale drillers that is expected to bring in another $294 million;
Effective next year, the budget would expand the insurance premiums tax to most previously exempt insurance entities to raise $141 million;
A reduction of $100 million in available tax credits;
Basic educating spending will get an increase of $100 million, Pre-K an increase of $65 million, special education an increase of $25 million, and a $10 million increase for Head Start programs; but, the more than $60 billion unfunded pension liability is left mostly unaddressed.
Wolf is also seeking to merge the Department of Corrections and Pennsylvania Board of Probation and Parole into new Department of Criminal Justice. He also wants to merge the Human Services, Health, Aging and Drug and Alcohol Programs departments into new Department of Health and Human Services. Savings: more than $100 million.
On the revenue side, the budget calls for leasing the Pennsylvania Farm Show Complex and Expo Center in Harrisburg to a private entity for 29 years for an upfront payment of $200 million. The state would then pay an annual fee to lease it back and transfer $165 million from the Worker's Compensation Security Fund.
Earlier this week, the Senate passed a bill that would put the state on a zero-based budget. That would require departments and agencies to start each budget year with zero dollars and force them to justify their budget requests for all existing and proposed programs.
Gone will be the days of simply taking last year's budgeted amount and simply adding a percentage to it for the new budget year – and making sure you spend it so you get more next year!
Hopefully, that bill will be passed by the General Assembly and signed by the governor in time for next year's process.
It can only help a state that needs to learn how to live within its means.