Eight Things We Want for the Holidays in the Pennsylvania Budget

State budget discussions have reached a critical point. The agreed-upon $350 million increase in education funding represents an important step towards the budget Pennsylvania needs. But while the latest proposal to extend the sales tax to more services would raise needed revenues, it would also place too much of the burden on Pennsylvania’s lowest-income families.

Even at the the 11th hour, lawmakers can achieve a better budget – one that reinvests in education and human services, raises adequate revenues in a fairer way, and strengthens families and communities. The Pennsylvania Budget and Policy Center calls on lawmakers to include the following eight proposals in a final budget fit for the holidays.

1. A sales-tax forgiveness credit that rebates sales taxes paid by Pennsylvania households that qualify for the state’s income-tax forgiveness program. This credit would offset the impact of a broader sales tax on families struggling to get by.

2. An increase in the minimum wage to $10.10 per hour, plus automatic indexing to inflation similar to the indexing that increases legislative salaries each year. This would not only put more money in the pockets of working families but would save $231.5 million on Medicaid costs.

3. Equitable distribution of education funding that restores funding to the low-income, high-poverty districts still suffering from deep cuts since 2011-12, and that also locks in the Basic Education Funding Formula for the future.

4. A severance tax on natural gas drillers that provides new, sustainable revenue from consumers outside Pennsylvania and profitable energy companies. We need these revenues to reinvest in education, eliminate the state’s structural deficit, and make Pennsylvania’s tax system fair to all. As this Daily News editorial points out, the justifications for not placing a severance tax on natural gas drilling make no sense.

5. Other revenue options that will help eliminate the structural budget deficit and reinvest in education including: a fix to the bank tax; an end to the smokeless tobacco and e-cigarette tax loophole; and a reduction in sales tax vendor discount (which over-reimburses retailers for collecting sales tax.)

6. No additional constraints on local districts’ ability to fund their schools adequately.

7. Fair pensions for future teachers, nurses, and other school and state employees – not another deep cut that would give Pennsylvania among the lowest state pensions in the nation, far inferior to the retirement benefits of federal government retirees. 

8. State action to make retirement savings plans accessible to all private workers (see pages 7-8 in this link), more than half of whom currently have no retirement savings plan at their job.