Fiscally Responsible Wolf Budget Invests in Education

Governor Tom Wolf  prepared his first budget facing an inherited $2 billion dollar deficit along with the expectation that he properly invest in public education.  During the course of the last 4 years, PA has dropped to one of the lowest contributing states to education K-12.   We also remain 1 of only 3 states without a state funding formula .  Charter school costs, rising pension obligations, and a host of other mandates have wreaked havoc on local school district budgets.  Against this very tough backdrop, Governor Wolf stepped to the podium to deliver his address to the legislature.

The Wolf K-12 Education Plan

• Basic Education Funding: $400 million increase.  B.E.F. was one of the few categories consistently increased during the Corbett years.  Those who supported the myth that Corbett increased overall education spending, often talked exclusively about this category ignoring the cuts or eliminations of other line items.
• Special Education Funding: $100 million increase.  For the majority of the Corbett years special education funding remained flat while costs to many districts increased by leaps and bounds. 
• Charter School Reimbursement/Reform: $160 million savings to local districts.  The charter school reimbursement was totally eliminated in Corbett’s first budget.  The loss of the charter reimbursement devastated school districts with high charter enrollments.  The PA State Auditor General Office has indicated that taxpayers are overpaying for charter schools in PA by roughly $365 million a year.  The Wolf Budget proposes to flat fund cyber charters, end the pension double dip and sets the cyber charter pupil reimbursement at $5,950 annually. 
• Other Funding Areas: $20 million for Career and Technical Education and Equipment Grants, $8 million for Career Counselors in middle schools and high schools and $9 million for Dual Enrollment.

Pension Reform

The Wolf Budget plans to issue $3 billion in bonds and attempts to save money by avoiding fees presently being paid to Wall Street.  Savings are reported at $8 billion over 24 years ($1.3 billion over the next 5 years).

The Wolf Tax Plan

• Marcellus Shale Tax: 5% severance tax used to fund education.  PA is the only shale state that does not use a severance tax.
• Sales Tax: Increased from 6-6.6% and expands items presently taxed.
• Income Tax: Increased from 3.07% to 3.7%.
• Corporate Net Income Tax: decreased from 9.99% to 5.00% in 2016 and then cut in half by 2018.
• Capital Stock and Franchise tax: Eliminated.
• Property Tax: Average of $1000 in savings per property and eliminated totally for roughly 270,000 seniors.

Basic and Special Education Funding Increase to Lehigh County School Districts

• Cattasaqua: 7.33%
• Northwestern Lehigh: 5.14%
• Northern Lehigh: 7.06%
• Parkland: 7.07%
• East Penn: 7.64%
• Salisbury: 5.07%
• Southern Lehigh 7.59%
• Whitehall Coplay: 5.01%
• Allentown 6.53%

Conclusion

The Wolf budget balances the state budget, increases education funding and redistributes the tax burden away from local property tax.  At this stage, the budget is far from a done deal.  State Republicans hold a sizeable majority in the Senate and House.  It is very possible that the budget passed could look slightly or totally different.  Budgeting is entirely about values and priorities.  Governor Tom Wolf has shown that he values public education and a very different way of funding it.  It’s now time to hear from the other PA citizens and elected state officials to see if they hold similar values.