HARRISBURG – Gov. Tom Wolf will unveil his sixth budget on Tuesday, a spending plan that he’s already indicated will include some familiar proposals, including a bid to increase the minimum wage and use a new tax on natural gas drilling to pay for a wide variety of spending proposals.
One big change this year is that the governor is proposing to make $1 billion available through the state’s Redevelopment Assistance Capital Program for school districts to pay for repairs to alleviate problems with lead and asbestos.
Despite that proposal, school officials are concerned, saying that state aid hasn’t kept pace with rising costs in other areas, most notably – pensions, special education and charter school bills.
Here’s a closer look at the key budget issues:
The fight over the minimum wage has taken center stage, since the state Senate passed a plan to boost the wages of the state’s lowest-paid workers but the state House has declined to act on it.
The state Senate in November approved a plan to increase the state’s minimum wage from $7.25 to $8 by July and to $9.50 by 2022.
Wolf had coaxed the Senate to act by threatening to increase the floor set to determine when salary workers must be paid overtime. When the state House didn’t budge on the issue, Wolf went ahead with the overtime change.
The state Independent Regulatory Review Commission on Friday approved Wolf’s plan to begin requiring that workers get paid overtime if they make they less than $45,000 by 2022.
“Today’s approval of my plan will modernize our outdated overtime rules so more people are eligible for time-and-a-half pay. This will put more money in the pockets of workers and strengthen the middle class,” Wolf said Friday.
Business groups had backed the Senate minimum wage hike saying that increasing the minimum wage wouldn’t be as bad as changing the overtime threshold.
Friday, Pennsylvania Chamber of Business and Industry President and CEO Gene Barr said the group was “deeply disappointed” by the move toward implementing the overtime change.
“Hundreds of opposition comments were submitted from a wide range of stakeholders – including nonprofits, higher education, local governments, small businesses among many others who described unsustainable cost increases and harm to workplace morale as employees are forced to be shifted from guaranteed salaries to hourly clock-in, clock-out positions,” he said.
The governor’s office estimates that the overtime rule will benefit 82,000 workers.
Wolf has also renewed his call for a $12 an hour minimum wage
“Pennsylvanians shouldn’t earn less than workers in West Virginia, Ohio, or New Jersey for the same job. We are a state known for our tremendous work ethic, but when jobs don’t pay enough, people can’t afford basics like food, housing, childcare and transportation,” Wolf said in announcing his renewed call for a minimum wage hike.
Pennsylvania’s minimum wage has been stuck at $7.25 an hour since 2009, the minimum wage allowed by federal law. Twenty-nine states have a higher minimum wage and 21 states are increasing the wage floor this year, according to the governor’s office.
House Republicans have resisted the call for the minimum wage increase saying competition to get workers is forcing most employers to pay above the minimum wage without a government mandate.
“According to Gov. Tom Wolf’s Department of Labor and Industry, the average wage in our state has increased by about 25 percent over the last 10 years,” House Majority Leader Bryan Cutler, R-Lancaster County, said. House Republican policies have paved the way for industries across Pennsylvania to increase wages at all levels of the employment spectrum.”
School officials warn that despite the proposal to help pay for repairs, districts are hamstrung by other increasing costs, principally from pension, special education and charter school bills.
“School district mandated costs are increasing and straining school district budgets. State funding is increasing, but it’s not keeping up with the growth, and the state’s share of funding in multiple line items continues to fall,” according to a report released Friday by the Pennsylvania Association of School Business Officials.
The school groups said the state needs to take a broad look at how schools are funded, including the fact that much of school funding comes from local taxpayers through property taxes.
Wolf has repeatedly asked the General Assembly to approve a new tax on natural gas drilling. Last year, he revamped the proposal by rolling out his Restore PA plan, calling for the drilling tax to be used to cover the payments on a $4.5 billion bond to pay for a host of efforts, including combatting blight and flood mitigation.
Wolf has announced that this year’s budget proposal will include the Restore PA proposal, a suggestion immediately opposed by the natural gas industry.
“Amid a sharp market downturn, Governor Wolf’s plan for additional energy taxes jeopardizes job-creating investment in Pennsylvania and will be a gut-punch to the hard-working employees, building trades union members and families who want to pay less for the energy they need, not more,” said David Spigelmyer, president of the Marcellus Shale Coalition, the trade group representing the drilling industry in Pennsylvania.