The Pennsylvania Chamber of Business and Industry commended the General Assembly for passing a responsible, on-time spending plan for the 2015-16 fiscal year, but the budget was vetoed by Gov. Tom Wolf late Tuesday.
The General Assembly's $30.1 billion spending plan increases basic education funding by $100 million and does not raise taxes.
“This pro-taxpayer proposal not only responsibly prioritizes state spending, but it also contains much needed pension reforms and moves toward finally doing away with Pennsylvania’s antiquated state-run liquor monopoly," Pennsylvania Chamber president and CEO Gene Barr said in a written statement.
In vetoing the budget, the Democratic governor said the spending plan was unbalanced and built on one-time revenues that would lead to a $3 billion deficit.
“Governor Wolf knows that we need to do serious work and to address the problems facing this commonwealth," said Jeff Sheridan, the governor's press secretary. "This includes enacting a plan that contains fair and adequate education funding in part by implementing a commonsense severance tax, provides property tax relief to Pennsylvania families and seniors, fixes the structural deficit and provides a sound plan to create jobs across this commonwealth. The Republican budget did not accomplish these essential tasks, so Governor Wolf did not approve it. Governor Wolf now hopes to work with Republicans to enact a budget that will fix education with a commonsense severance tax, reduce property taxes, and eliminate the deficit."
House Speaker Mike Turzai, R-Allegheny, told Pennsylvania Business Daily in a written statement, “It's disappointing and disrespectful to taxpayers that such short shrift was given to an on-time, fiscally responsible taxpayer's budget that delivered no tax increases, increased education funding, full funding for human services and kept spending below the rate of inflation."
The vetoed budget, Barr argues, addresses the coming fiscal year’s structural deficit without raising taxes on Pennsylvania’s job creators and hard-working taxpayers, while at the same time increasing funding toward important programs.
Basic education is funded at $5.6 billion, a $100 million increase over the current year. Simply put, the chamber says Pennsylvania taxpayers can’t afford to take on the Wolf administration’s proposed massive tax hikes.
The budget dedicates nearly $11 billion in total state funding for education. According to the most recent data from the U.S. Census Bureau, the Commonwealth ranks in the top 10 in the nation in per-pupil education spending in local, state and federal funding. More than $27 billion in combined local, state and federal funds goes towards education in Pennsylvania.
Barr said the legislature’s budget plan stands in stark contrast to Wolf’s original proposal, which would have raised and expanded a number of taxes to pay for nearly $5 billion in proposed spending increases. The chamber also opposes the Wolf administration’s proposed severance tax on the natural gas industry, which would result in the highest effective tax rate in the nation. The tax would drive thousands of jobs and economic opportunity to other states in the shale play and have a negative economic impact on Pennsylvania’s fastest-growing industry, the chamber says.
In addition to the state spending plan, the General Assembly also passed a bill in both chambers that would change the public pension structure for new state and public school employees. The legislation would move future employees’ into a 401K-style pension program. The proposal was amended from its original version to remove changes to the benefit multiplier for current employees’ future earnings.