Wolf’s Budget: Sure the Spending Sounds Good, But at What Cost?
By Rep. Seth Grove (R-York)
On March 3, Gov. Tom Wolf outlined his budget priorities for the coming fiscal year. The spending plan would increase spending from $29 billion to $33.8 billion, an increase of 16 percent or $4.7 billion in a single year and $12.7 billion over the next two years. It has become increasingly clear since his budget address the governor’s unprecedented spending increase is built on a foundation of higher taxes and is harmful to middle-class families and small business owners.
The tax increases Wolf proposed include an increase in the Personal Income Tax (PIT) by 21 percent and the Sales and Use Tax (SUT) by over 40 percent. Not only would this result in Pennsylvanian families facing a higher tax burden, but businesses would also see higher taxes, since 79 percent of Pennsylvania companies pay their taxes under the PIT. This is destructive to our economy as small businesses account for 65 percent of our job creation.
The governor also proposed increasing the Sales and Usage Tax from 6 percent to 6.6 percent and removing over 550 exemptions. That’s right, over 550 NEW taxes. Under Wolf’s budget, Pennsylvanians will be paying new and increased sales taxes from the cradle to the grave, including sales tax on items such as diapers, child care, textbooks, non-prescription drugs, domestic violence shelters, food banks, nursing home services and caskets. This higher sales tax impacts lower and middle-class Pennsylvanians the most, as these families pay a disproportionately higher amount of their income in sales tax.
In addition to raising taxes, the governor’s budget calls for increasing the minimum wage to $10.10 an hour, forcing small businesses already facing higher taxes, to be straddled with over $141 million in higher costs, which doesn’t include the additional $1 billion cost of actually increasing wages to $10.10 an hour. Did you know there are only about 157,000 Pennsylvanians or 2.6 percent of our total workforce who make minimum wage? Eighty-one percent or 127,000 of them are 24 years old and younger and only 11 percent or 17,000 are single parents. Minimum wage jobs have been decreasing every year in Pennsylvania. This government mandate on the private sector will force businesses to provide fewer benefits, furlough employees, raise prices, not hire new employees or close. Combining the tax increases and minimum wage increase will result in a death blow to businesses and workers throughout the commonwealth.
This being said, I appreciate the governor for starting a discussion on certain issues. One of these areas was the need for property tax reform. I agree with Wolf: Pennsylvanians in many areas are in desperate need of property tax relief. However, the governor’s plan calls for raising $6.8 billion in taxes, but provides taxpayers only $3.7 billion in property tax relief in two years after you start paying the increased taxes. This $3.7 billion in relief also includes the $600 million homes owners already receive from slot machines. The remaining $3.1 billion will sit in a government account.
Under the governor’s budget proposal, residents in 404 of the 500 school districts will end up paying more in taxes than what they receive back in property tax relief. For taxpayers in York County, only the taxpayers in York City and Northeastern school districts will receive more relief in property taxes than what they pay in new and increased taxes. This is one of greatest distribution of wealth schemes I have ever seen. Taxpayers can see how their school district fares under the governor’s budget at www.TaxpayersThatPay.com.
Although the governor’s budget represents the start of a budget discussion with the General Assembly, it was disappointing to see the governor offer a budget which hurts our economy and the middle class. By significantly raising the PIT and SUT, Wolf is generating new revenue for spending on the backs of middle-class families and on the backs of the small businesses which employ them. In addition, the governor’s tax increases will raise the overall tax liability of Pennsylvanians without providing for property tax relief. In his budget address, Wolf challenged the legislature to introduce its own proposals as an alternative to his budget. I look forward to working with my colleagues in both chambers along with the governor, on crafting a budget which protects taxpayers, grows our economy and provides more Pennsylvanians a path to prosperity.
Representative Seth Grove

196th District
Pennsylvania House of Representatives

Media Contact: Nick Ruffner
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