Gov. Wolf Lays Out Budget That Cuts Spending, Raises Minimum Wage

Democratic Gov. Tom Wolf has a message: Pennsylvania can no longer live beyond its means.

“Households can’t do that; neither can we,” he told the state legislature in Harrisburg Tuesday.

Wolf, who is facing re-election next year, announced his $32.3 billion spending plan before the state House of Representatives and Senate. His tone, unlike past years, was nonpartisan and focused on reducing costs, not increasing the tax burden on the middle class and using precious state funds for programs that have an impact.

Wolf is proposing investing $200 million more in education, nearly $25 million for mental health and millions toward fighting the growing opioid crisis. He also announced he planned to close corporate loopholes that hurt the state and lower revenues.

In a move likely to please fiscal conservatives, Wolf said proposed downsizing of state government would cast off excess facilities, offer early retirement incentives to higher paid state workers and combined some departments. The total cuts in spending are proposed to come to more than $2 billion in addition to millions shaved off in recent years.

“Some of these reforms are simply long overdue common sense measures – like centralizing shared services like human resources and information technology, selling property the state owns but doesn’t use, or consolidating pension funds to save millions that used to flow into the pockets of too many Wall Street financial managers,” he said.

The governor noted that Pennsylvania’s $3 billion structural deficit needs to be closed and money needs to be put back into the rainy day fund. He laid out a vision of increasing the $245,000 rainy day fund to almost $500 million by 2022.

Wolf’s budget includes one item that will certainly be a challenge to move through the Legislature. He announced his intention to raise the state’s minimum wage from $7.25 to $12, which would raise additional tax revenue.

One novel approach for increasing revenues and recovering funds spent by the state police who patrol the 67 percent of municipalities that rely solely on their services would be a $25 per resident fee. In his budget document, the governor stated that state police “coverage comes at no cost to the municipality and is borne by taxpayers statewide, who in many cases support their own local police coverage through local taxes.”

“The kind of change I’m trying to bring to Harrisburg won’t come easy. If reforming our state government and putting Pennsylvania back on a path to fiscal stability were easy, these things would have been done long ago. And I can’t do it alone,” he said.

“I believe that we can leave the frustrating politics of old behind us and work together to build a brighter future for all Pennsylvanians.”

The budget still has a months-long process ahead of it to get approved in-part or as a whole, which is unlikely. A final vote on the budget is expected in June.