Inquirer Editorial: Pensions, taxes again loom large in reaching a Pa. budget deal

Maybe, just maybe, this year Gov. Wolf and the Republican-controlled legislature won't waste time and money endlessly bickering over the state budget.

Maybe Wolf's decision not to ask for a large tax hike and Senate Majority Leader Jake Corman's recognition that governments must be able to provide essential services will make the budget process much easier than in the last two frustrating years.

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AVI STEINHARDT / For the Inquirer

Because the process has just begun, it is important to be hopeful, positive, and creative. But some good ideas floating around Harrisburg also warrant optimism as Republican legislators prepare to receive their Democratic governor's spending plan.

Corman rightly wants to fix the state pension system to save money now and in the future. Solid restructuring also can improve the state's credit rating and lower borrowing costs. Harrisburg hasn't shown an appetite to make major pension changes, which means if Corman really wants to reduce the state's more than $50 billion unfunded pension liability, he must be prepared to make a deal.

Realigning taxes could make a big difference in the economy and the state's bottom line. Wolf shouldn't abandon efforts to impose a severance tax on natural gas, making the industry pay its fair share. And elected leaders should admit that the gradual business tax cuts they enacted didn't lead to higher overall employment. Instead, the cuts lowered the public's quality of life by reducing revenue needed to educate children, fix roads, and provide other services. Business tax cuts account for about half the state's $600 million deficit.

One way to improve Pennsylvania's quality of life would be to follow the example of nearby states and raise its minimum wage. Higher wages generate more tax revenue, reduce social services costs, and push more cash into the economy as people in lower-wage brackets quickly spend their earnings. Residents leaving for higher wages is one reason the state is losing population.

Wolf is unlikely to have much new money for programs, so he should focus on funding areas with the greatest potential for impact. He also may need to fortify the state against dubious decisions made by the new presidential administration. That includes strengthening the state Department of Environmental Protection to counter President-elect Donald Trump's expected assault on federal environmental protections.

Wolf also must persuade GOP legislators to prepare for potential costs associated with congressional Republicans' determination to repeal the Affordable Care Act. If Obamacare dies without an immediate replacement, families regardless of party affiliation will be hurt. Pennsylvanians got a taste of what that's like when the Corbett administration kicked 100,000 eligible people off the food stamp rolls and threw 78,000 severely ill children off Medicaid.

Wolf's strengths include his compassion, which helped him work with legislators to permit medical marijuana and combat the opioid crisis. Count Corman among those Republican leaders whose strength is their pragmatism. Those qualities - compassion and pragmatism - can help produce a budget that makes sense.

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