Budget Proposal Includes Minimum Wage and PIT Increases

On Tuesday, Gov. Tom Wolf unveiled his 2016-17 state budget proposal to a joint session of the state House and Senate. The address was different than any other in the Commonwealth’s history, as the Governor gave it at the same time that parts of the current fiscal year’s spending plan remain unfinished.

While the Governor did not mention any details in his address, the 2016-17 proposal includes an 11 percent increase in the personal income tax from 3.07 to 3.4 percent, an increase in the minimum wage from $7.25 to $10.15 an hour, a natural gas extraction tax, and expanding the sales tax on some items. Wolf had proposed a number of these changes in the 2015-16 budget, but backed off as the negotiations continued.

One of the major unresolved issues for 2015-16 is education spending levels. The governor continues to demand $377 million more for basic education funding this year – a number that was reached in a budget framework agreement that crumbled in December. He added another $200 million in the 2016-17 budget proposal plus an additional $60 million for pre-K education

In response, Republican legislative leaders told reporters that the governor is acting irresponsibly with his spending demands.  Senate Majority Leader Jake Corman said Gov. Wolf is “doubling down on his failures to provide leadership on accomplishing a bipartisan budget agreement by asking for even more taxpayer money without addressing the changes needed for long-term relief for Pennsylvania schools.”