HARRISBURG — Gov. Wolf on Tuesday unveiled an election-year budget of nearly $33 billion that would boost funding for public schools, hike the minimum wage, expand the fight against Pennsylvania’s opioid addiction crisis — and slap a new tax on natural gas drillers.
“We have finally begun to tame the fiscal beast that haunts Harrisburg,” Wolf told a joint session of the legislature.
His speech — nearly 20 minutes long — was one of the shortest in recent memory and included nods to bipartisanship, a recognition that Wolf faces reelection and wants to avoid the broad tax-hike proposals that led to his prolonged battles with the Republican-controlled legislature in the last three years.
The longest and loudest applause came at the start, when Wolf briefly — and uncharacteristically — went off script to don an Eagles hat, bringing Republicans and Democrats to their feet.
“Fly, Eagles, Fly,” the governor said, as the familiar chant broke out in the House chamber.
Afterward, Republican legislative leaders said they approved of parts of the governor’s proposed budget, including a bigger investment in job training.
But they objected to Wolf’s proposed $1 billion increase in overall spending — about 3.1 percent more than the current fiscal year — and to the idea of a severance tax on gas drilling in the Marcellus Shale.
“It’s interesting that, once again, Republicans in the General Assembly are going to have to be the adults in the room,” said House Speaker Mike Turzai (R., Allegheny), who said Republicans are not interested in increasing taxes. Turzai is among four Republicans running for the GOP nomination to challenge Wolf in November’s election.
Under his plan, Wolf would spend $100 million more on public school funding and $40 million more on early childhood education, and provide an additional $20 million for special education and $15 million for the 14 universities in the State System of Higher Education. He also announced a $50 million job training initiative.
The governor also called for boosting funding by $4.5 million for home visits by nurses or health aides to help an additional 800 families affected by opioid abuse; increasing by at least $16 million state spending on services for people with intellectual disabilities and autism; and providing $6 million for a pilot program to equip Pennsylvania State Police troopers with body cameras.
Wolf also wants to increase the hourly minimum wage to $12, up from the federal minimum of $7.25, a move his administration estimates would save $100 million in social and human services costs by putting more money in the pockets of the working poor.
On the opposite side of the ledger, Wolf avoided calls for any hikes in the state sales and personal income taxes.
Instead, the governor is once again turning to the natural gas industry to raise new dollars. His proposed volume-based levy pegged to the price of natural gas would raise an additional $250 million, the administration estimates. The Wolf budget also rests on optimistic revenue projections based on current tax returns.
Wolf has called for a shale tax in all three of his previous budget proposals — with no success. Many Republicans in the House oppose such a measure.
On Tuesday, Wolf opined on why enacting a severance tax has been a difficult lift: “The truth is, as rich as our commonwealth is in some natural resources, special interests have put political courage in short supply.”
The industry, which has spent millions on lobbying in recent years, was quick to push back. In a statement Tuesday, David Spigelmyer, president of the Marcellus Shale Coalition, accused Wolf of “putting politics first by proposing additional energy taxes that will make hiring and investing in Pennsylvania more difficult for local job creators, small businesses and manufacturers.”
Drillers do pay the so-called impact fee that the legislature approved in 2012 in lieu of a severance tax. That money is largely parceled out to local communities — many rural and with struggling economies — where the drilling occurs. Wolf’s proposed tax would be added to that fee.
Wolf is banking on raising $63 million by a renewed call for a $25-per-person fee for State Police service in municipalities with no police force — though he didn’t mention it in the speech; and $71 million from new lottery games, including iLottery and terminal-based games for virtual sports and keno.
The governor’s budget, which if approved on time would take effect July 1, is expected to get broad support from Democrats in the legislature, who have long pushed for a new drilling tax and a hike in the minimum wage, both popular ideas with the party’s base.
“There is very little that he said that is controversial, other than the severance tax,” said Sen. Art Haywood, a Democrat representing parts of Philadelphia and Montgomery County. “I think he and the legislature have learned how to work together.”
Rep. Margo Davidson (D., Delaware) praised the governor’s continued emphasis on education funding but said she would have liked to hear more from Wolf about ways to address gun violence, which she called “a public health threat.”
“We need a champion who has the bully pulpit of the governor,” Davidson said.
Over the last three years, GOP legislators and the Democratic governor have locked horns over how to deal with crippling deficits and the state’s troubled finances.
Their fighting got so bad that Wolf has not agreed to a complete budget package in any of his three years in office, instead letting them lapse into law without his signature.
This year, however, there is an incentive for both sides.
It is an election year, with all 203 seats in the House of Representatives, and half the 50 seats in the Senate, up for grabs. Several legislative leaders with sway over the budget are running for higher office.
Turzai is running to snag the Republican nomination for governor. House Majority Leader Dave Reed (R., Indiana) is running for Congress.
A prolonged budget battle would force legislators to remain in the Capitol over the summer instead of campaigning. It also could sour public opinion.
But the governor was ever the optimist.
“I have never been more confident of our people. I have never been more hopeful of our future,” Wolf said, imploring lawmakers to “consider this budget proposal an invitation to join me in building that future, together.”