AP NEWS

Highlights of Gov. Tom Wolf’s state budget proposal

February 5, 2019

HARRISBURG, Pa. (AP) — Highlights of Pennsylvania Gov. Tom Wolf’s spending plan for the 2019-20 budget year that starts July 1:

THE BIG PICTURE

— Increases spending through the state’s main bank account to $34.1 billion. Including nearly $500 million for the current fiscal year, Wolf is seeking authorization for another $1.9 billion in new spending, or nearly 6 percent of this year’s enacted budget of $32.7 billion.

— Projects a nearly 3 percent increase in tax collections to $35.3 billion, before refunds. Does not increase tax rates on sales or income, the state’s two biggest sources of revenue.

— Calls for lawmakers to raise the state minimum wage to $12 an hour on July 1, up from the federal minimum of $7.25 an hour.

TAXES AND FEES

— CORPORATE INCOME TAXES: Restructures how the state would calculate corporate profits to adopt “combined reporting” and reduces current 9.99 percent tax rate by annual steps to 5.99 percent in 2024. The move is revenue neutral initially.

— POLICE FEE: Collects per person fee from municipalities that do not have their own full-time police force and instead rely solely upon state police for coverage to raise $103 million. The fee is imposed on a sliding scale based on a municipality’s population.

— ASSESSMENTS: Imposes new or higher assessments on Medicaid providers to raise an additional $150 million in the first fiscal year.

SAVINGS MEASURES

— Projects an aggregate of $120 million in improved tax collections and lower human services costs by raising the minimum wage to $12.

— Delays a $285 million payment to behavioral and physical health providers in the Medicaid program into a later fiscal year.

— Taps $400 million in surplus cash already appropriated in the 2018-19 and 2019-20 fiscal years.

SPENDING BY CATEGORY

— HUMAN SERVICES: Grows about $400 million, or 3 percent, to $13 billion.

— PRE-K-12 EDUCATION: Grows $449 million, or 4 percent, to $12.7 billion.

— HIGHER EDUCATION: Grows $15 million, or about 1 percent, to $1.4 billion.

— CORRECTIONS AND PAROLE: Grows $17 million, or less than 1 percent, to $2.6 billion.

— PENSIONS: Grows $174 million, or 5 percent, to $3.5 billion.

— STATE POLICE: Grows $33 million, or 3 percent, to $1.3 billion.

— DEBT: Grows $67 million, or 6 percent, to $1.2 billion.

EDUCATION

— Increases aid for general public school operations and instruction by $200 million, or 3 percent, to $6.3 billion.

— Increases early-childhood education funding by $50 million, or 20 percent, to $301 million.

— Increases special education funding by $50 million, or 4 percent, to $1.2 billion.

— Increases aid to Pennsylvania State System of Higher Education by $7 million, or 1.5 percent, to $475 million.

— Seeks $45 million for school safety grants, as a successor to a first-time school safety program of $60 million.

— Seeks $8 million to give community college students who remain in Pennsylvania a $2,500 grant to offset tuition or pay down student debt.

VOTING MACHINES

— Pledges $15 million a year for five years, or $75 million total, to help Pennsylvania’s counties pay for new voting machines in time for the 2020 election.

POLICY

— Raises the state’s decades-old minimum wage for teachers from $18,500 to $45,000.

— Raises the age at which children in Pennsylvania must attend schools, currently age 8, to age 6, a change projected to affect about 3,300 children.

— Raises the permissible dropout age from 17 to 18. State officials said nearly 4,400 17-year-olds left school without graduating in the 2016-17 school year.