State Republicans this afternoon had measured praise for Gov. Tom Wolf’s fifth budget proposal, saying that while they support his initiatives to develop Pennsylvania’s workforce, they may oppose proposals to increase overall spending.
“I think we’ll break the normal tradition as the opposition to come out and ridicule or complain about the governor’s proposal,” Senate Majority Leader Jake Corman, R-Centre, said during a press conference after Wolf’s Tuesday address. “There is a lot there we can get behind, at least generically. The governor laid out priorities that I think we all share, workforce development being chief among them.”
In a joint address to the General Assembly, Wolf proposed a $34.1 billion budget for the 2019-20 fiscal year that calls for flat taxes and a 2.79 increase in spending.
The governor said that natural growth in tax revenues would partially cover the spending hike. Any remaining deficit would be plugged with monies from various fees and a transfer from the state Lottery Fund.
The chief priority of Wolf’s budget this year is workforce development — a broad goal he wants to pursue with a series of cash infusions to educational, agricultural and work training programs across the state.
The budget also includes a suite of economic policy reforms. Chief among them are Wolf’s plan to increase Pennsylvania’s minimum wage to $15 by 2025 and a proposal to gradually lower the state’s Corporate Net Income Tax (CNIT) rate from its current 10 percent to 6 percent.
Republican leaders applauded the governor’s proposed CNIT reduction, saying they welcomed any policy that makes Pennsylvania more attractive to businesses.
“We absolutely agree that our business tax structure is burdensome and the tax rates are too high, which creates disincentives for us to grow our economy and employ more of our citizens,” House Majority Leader Bryan Cutler said. “Governor Wolf’s budget sets forth a series of ideas that I believe House Republicans can find agreement on and that our members were elected to tackle.”
However, they suggested that the governor’s proposed minimum wage hike will be a potential sticking point in budget negotiations.
Last week, Wolf revived his proposal to increase the state’s minimum wage to $12 an hour in July and then raise it by 50 cents per year through 2024, when it would hit $15 an hour.
At its current rate of $7.25 per hour, Pennsylvania’s minimum wage is lower than in neighboring states like Maryland, New Jersey and New York.
Republican leaders argue that a growing labor market has already left the state’s 10-year-old wage floor in the dust. Raising the minimum wage would only eliminate jobs and increase bureaucratic regulation, they said.
“Clearly the market has moved beyond [minimum wage] for the majority of our jobs,” Cutler said. “I think it’s more important to focus on areas where we all agree, and I think that one area we do agree is workforce development.”
Republicans also expressed skepticism that educators across Pennsylvania would benefit from Wolf’s proposal to increase minimum teacher salaries.
The governor’s budget includes a $200 million increase in basic education funding, a small portion of which would be used to raise the salaries of teachers across the state to a minimum of $45,000 per year.
“The first question in my mind is, ‘Is anyone actually paying the minimum salary?’” Cutler said.
The Pennsylvania State Educators Association estimates that 5,152 teachers in 288 districts across Pennsylvania earn salaries under $45,000, based on an analysis of 2017-18 data from the state Department of Education and collective bargaining agreements.
Republicans also took issue with Wolf’s proposed 2.79 percent spending hike.
The governor’s proposed budget would generate $33.9 billion in revenue and allocate $34.1 billion in expenditures — a $927 million spending increase from last year.
Senate Pro Tempore Joe Scarnati, R-Jefferson, said he was troubled that the state’s spending was outpacing its income from taxes and fees.
“We have to balance it down,” Scarnati said. “This budget’s not just going to be a slam dunk. We have a lot of work to do.